The Zimbabwe dollar lost value against the United States dollar (USD) once again at the Reserve Bank of Zimbabwe’s wholesale foreign exchange auction held on September 19, 2023.
The RBZ reported that the USD was valued at ZW$5,015.4279 this Tuesday, which is higher compared to the rate of ZWL$4,712.1675 recorded on September 12, 2023. This increase follows the previous rate of ZWL$4,647.9681 observed on September 6, 2023.
Regarding the allocation of foreign currency from the auction, the majority, amounting to $275,395.54, was assigned to Machinery and Equipment. Services such as loans, education, dividends, and disinvestments received $163,240.14, while Consumables (including spares, tyres, electricals, etc.) followed closely with an allocation of $121,390.64. Raw materials obtained the lowest allocation of $45,391.75.
The total allocated amount was $713,950.34, which is a decrease from the previous allocation of $1,161,863.98.
In recent months, there has been a noticeable increase in the allocation of funds towards Services.
This allocation pattern represents a departure from the usual trend where raw materials typically received a larger share of the funds. The shift in allocation suggests changing priorities or demands within the economy post the 23-24 August 2023 elections.
These developments highlight the ongoing fluctuations in the exchange rate and the distribution of foreign currency across various sectors of the Zimbabwean economy. The stability of the exchange rate is yet to be determined, but some economists predicted that the Zimbabwean dollar may further depreciate after the period of August 23-24, 2023. They say this could occur if the newly-elected government does not take necessary measures to address the fundamental issues required for stabilising the macroeconomy and the local currency.