admin
Herald Reporter
The Zimbabwe dollar climbed in value another 3 percent on Thursday to $5 251,0640 to US$1 in the second wholesale foreign currency auction for bankers, taking its gains since the beginning of last week when it hit its lowest level against the US dollar to 24,43 percent.
The spectacular progress of the local currency slowed a little yesterday, the fourth consecutive bankers auction where it has gained value, but it was still gaining in value and this will be reflected in today’s interbank rate, the lowest since 12 June.
As with the last three auctions, the main driver of the growing value of the local currency was the fact that more US dollars were on sale than the banks had local currency to buy them.
The Ministry of finance and Economic Development put US$20 million on sale through the reserve bank, most of that money being the leftovers from Tuesday’s auction and the two auctions last week.
But the banks could only buy US$4,46 million, a bit more than on Tuesday.
This time all 10 bids were accepted without the lowest one being rejected for being too low and far from the cluster of successful bids. The highest price a bank paid for a US dollar yesterday was $5 400 and the bank that won the best deal paid just $5 000 for a dollar.
This week the very wide gaps between what the top-bidding bank was prepared to pay and what the lowest paying bank achieved was cut to little under 7 percent on Tuesday and just 8 percent yesterday. The Tuesday figure was partly because the bottom bid was rejected as being too far out of the range, even though the amount of money available for sale was more than four times what bidders could find the local currency to buy.
Banks all have different rates and are the only sector that does not use the interbank rate although they generate this. Each bank send its buy and sell rates and the amount of business it will do that day to the Reserve Bank every morning and the weighted average is the interbank rate. Neither the Government nor the Reserve Bank has any say on what rates the banks will charge. When there is an auction that weighted average operates as the interbank rate the next day.
leeroy