daniel chigunwe
Business Writer
The Zimbabwe dollar took another huge tumble at Tuesday’s auction system the third time of trading under a pure Dutch auction system.
The exchange rate tumbled from $2,577.05 last week to $3,673.77 this week, representing its biggest fall in three weeks.
Following a massive currency depreciation on the widely used parallel market, the Zimbabwe government announced a raft of measures including fine-tuning the widely criticised auction system into a pure Dutch auction system.
Further, the central started announcing the envelope of foreign currency available for sale in the next auction.
“The Foreign Exchange Auction System will be further fine-tuned and will now auction a pre-announced envelope on a pure Dutch auction basis,” read part of the measures announced by Finance and Economic Development Minister Mthuli Ncube.
The fall of the local currency is in line with what RBZ governor Dr John Mangudya was quoted saying on Tuesday.
In an interview with The Chronicle, Dr Mangudya said the central bank’s expectation is that “there will be a narrowing of the official exchange range and the parallel market rates due to the refinement of the auction system. Therefore, by the end of the month, consumers should expect to witness a modicum of stability in prices of basic commodities.”
Tuesday’s auction saw approximately US$25 million worth of bids being received but the central bank only allotted US$4,9 million.
Bongani Ndlovu