Business Reporter
THE Zim$ official rate Tuesday reached US$1:ZW$856 on the Reserve Bank of Zimbabwe (RBZ) Foreign Exchange Auction to close the wide gap created by the parallel market rate, effectively strengthening economic stability.
The official rate was lagging behind the parallel market rates since December 2022 on the back of bulk payments made to government contractors which are suspected to have beefed up supplies in the alternative market.
RBZ Auction trading updates dating back to January 17 2023 shows that the official exchange rate then was at US$1: ZW$732 which as of this week had deteriorated to US$1: ZW$831,60 signifying a 13,5% depreciation.
This week the official exchange rate closed trading at US$1:ZW$856 with a possibility to reach ZW$935 when the 10% permissible by the central bank is added above the official rate.
Currently, the parallel market rate is hovering around ZW$950- ZW$1100 against the greenback.
In Twitter thread, economist Persistence Gwanyanya had this to say;
1) lt appears we are on the right track to rate convergence
2) At Weighted Average Rate (WAR) of US$1: ZWL856.84, the official exchange rate for use by business is around US$1: ZWL950, being 10% of the WAR.
3) This rate is compares well with the parallel market rate now ranging from $1: ZWL950-1100 and within the acceptable premium of 10-15%
4) Judicious liquidity management by Treasury is expected to make RBZ’s work towards attainment of durable stability easier.
