Zimbabwe forex auction only accounts for 22% of foreign payments from January to March 2022


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The Zimbabwe dollar could be under pressure because the foreign currency auction system which is supposed to address foreign currency problems in the country only accounted for 22% of the foreign payments in the first quarter of this year.

The auction system is supposed to stabilise the local currency but 76% of the payments were from foreign currency accounts held by companies.

A total of US$1.8 billion was paid out in the first quarter but the auction only provided US$402.5 million while foreign currency accounts paid out US$1.4 billion. Only US$40.5 million was paid through the interbank market, translating to a paltry 2%.

The Zimbabwe dollar has been under siege of late and is now trading at between $300 and $345 to the United States on the parallel market while the auction rate is $155.14.

 

 

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Charles Rukuni
The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.

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