The Zimbabwe dollar today firmed by nearly $600 against the United States dollar reversing months of its downward trend. It averaged $6 326.5877 up from $6 926.5764 last week.
The appetite for the United States dollar seems to be ebbing. According to the Reserve Bank of Zimbabwe, commercial banks only bought US$10 million for their clients at today’s wholesale auction when US$30 million was on offer.
It is not clear whether the firming is sustainable but today’s auction coincided with the start of the quarterly tax payments by companies.
The Ministry of Finance is insisting that companies pay half of their quarterly taxes normally payable in foreign currency in the local currency while at the same time it is not accepting payment for taxes normally paid in Zimbabwe dollars in any foreign currency including the United States dollar.
Zimbabwe is holding elections in August and there were fears that the depreciation of the local currency which saw inflation shoot from 86.5% in May to 175.75% in June would be the downfall of President Emerson Mnangagwa’s government.
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