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The Zimbabwe dollar moved marginally by less than a third of a Zimbabwean cent, against the US dollar at yesterday’s Reserve Bank of Zimbabwe (RBZ) foreign currency auction, trading 0,004 percent higher at 81,3531 compared to last week’s 81,3499.
Although both the lowest bid and the highest bid moved upwards, the lowest bid to $80 and the highest to $89, it is obvious that almost all bidders are now within a cent or two of the previous rate. October has seen hyper-stability on the auctions with weekly movements well below a hundredth of a percent.
“I think we will continue to see stability,” said economist Eddie Cross, “because that reflects the fundamentals.”
Key to the fundamentals indicated by Mr Cross has been Government’s deliberate efforts at expenditure containment.
Through the Transitional Stabilisation Programme (TSP), which is coming to an end this year, the authorities have managed to reverse both the country’s fiscal and current account deficits.
Data from Treasury shows that fiscal deficit as a percentage of gross domestic product (GDP) declined from -10,5 percent in 2017 to a surplus in 2019, and so far this year a balanced budget.
And the current account improved from a deficit of US$1,4 billion in 2018 to a surplus of US$311,2 million in 2019, with indications that Zimbabwe is continuing to export more than it imports. Herald
