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

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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