- ZWL depreciated by 3% to ZWL 416.2890
- Year-to-date losses widen by 73%
- Month-to-date losses widen by 12%
Harare- In barely four weeks, the Zimbabwe dollar has depreciated by 12% since July commenced.
The latest results from the RBZ-governed Auction Market shows that the ailing currency further depreciated by 3% to 416.2890 on Tuesday from 403.4048 traded last week widening month to date (MTD) loses by 12%.
On year on year basis, the ZWL has fallen by 73% on the formal market with price inflation increasing by an average of 14.3% per month while since 2019 when ZWL was introduced, deficits have widened by over 80%.
Due to fiscal indiscipline by the Treasury and RBZ through pumping more money into the market to cushion civil servants and support Presidential schemes, the ZWL is far from gain traction.
The government has doubled its budget by offering numerous incentives together with a 100% salary hike for all public workers. Government expenditure is also going to balloon as prices of farm inputs which are provided to farmers yearly under the Presidential Input Scheme and Command Agriculture have rocketed courtesy of the Russia-Ukraine war.
This asset that the Zimbabwe dollar is far from gaining momentum.
On the parallel market, the disparity between the US dollar and the Zimbabwe dollar has widened to a range of 850 and 1000 and the currency since the beginning of the year has depreciated against the dollar by over 90%.
In Zimbabwe, the parallel market is the main source of foreign currency for the informal economy -an economy constituting about 70% of Zimbabwe’s total economic activity and employing at least 80% of the citizens.
The continued fall signals the worthless of the government’s efforts to prop up the currency, including the ones announced by President Emerson Mnangangwa that saw bank rates spiked to record highs.
Meanwhile, US$ 24.1 million was allotted this week up from US$22.9 million allotted last week while the highest rate received was ZWL 500 against the dollar and the lowest bid came at ZWL 399 for US$.
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