Zimdollar Eases 0.39pc

The Zimbabwe dollar eased by a marginal 0,39 percent against the US dollar in yesterday’s Reserve Bank of Zimbabwe (RBZ) foreign currency auction, with the exchange rate for US$1 shifting to $81,67 from $81,35 the previous week.

But the movement, while the largest weekly shift for seven weeks, was still trivial, stressing the continued confidence of bidders in the stabilising effect of the forex auction system, coupled with confidence that Government is tightening its own impressive levels of fiscal discipline, with farm input schemes this year for example run by banks under banking rules.

Observers project that the auction-determined official foreign currency exchange rate will move very slightly up and down each week until year end with none of the economic fundamentals changing.

“The exchange rate has stabilised at around $1:$80 to the US dollar, and we don’t see the rate moving significantly from that level,” said economic analyst Mr Persistence Gwanyanya.

“Normally, the fear is that during this period agriculture funding would impel money supply, but that funding is now done through banks. We have seen fiscal prudence from Treasury, and that tightness is likely to persist in 2021.”

Although there have been concerns over increases in utility services charges such as water charges and power tariffs over the past two months, Mr Gwanyanya said the tariff adjustment was actually a “necessary price re-alignment.”

These increases were not made when the private sector was showing up prices in the first six months and were now inevitable. Herald