The Zimbabwe dollar has recorded a 6,1% decline on the Reserve Bank of Zimbabwe (RBZ) Foreign Exchange Auction but market watchers have hinted that the development is a good sign which will close the parallel market gap.
A trading update released at the close of business Tuesday shows that the value of the local currency went down to US$1: ZW$580, 18 from a figure of US$1: Zw$546 recorded last week to signify a 6, 1% decline.
The local currency’s value has been waning for the last three weeks on the auction.
However market watchers contend that the developments are still in the positive trajectory considering that the official rate continues to depreciate at a time when the parallel rate has remained stable implying that the gap between the two exchange rates are slowly converging.
Over the past week, premiums on the parallel market have averaged between ZW$700 – ZW$800 against US$1.
“Total value of bids accepted US$12, 9 million, highest bid received ZW$630 and a low of ZW$545 on the Main Auction,” the update said.
Priority on both platforms went towards meeting the productivity cause with raw materials being allotted US$5, 7 million, machinery and equipment, US$2, 4 million, consumables US$875 799, Retail and distribution US$740 139, pharmaceuticals US$200 092, paper and packaging US$47 833 on the Main Auction.
In the SME Auction, 341 bids were accepted with a total value of US$3,1 million with the bulk of which going towards economic production.
A grand total of US$ 14,148 million was allotted on both platforms.