Interbank FX Auction System determines a market rate of 1:57 on 1st day

The interbank market’s new FX Auction System went live earlier today and the results have now been published. The rate of US$1: ZW$25 is no more and the new average rate determined by the market today was 1:57.

The amount available for auction today was US$10.3 million and the highest bid was at a rate of 100, whilst the lowest was at 25.5 (either an initial bid or a government institution doing their best to keep the rate low). The weighted average rate was 57.3 which becomes the “official” market rate until the next auction in a weeks time.

The US$10.345 million that was auctioned today was distributed as follows;

PurposeAmount alloted
Raw Materials2 883 052.05
Machinery and equipment2 407 666.89
Food and beverages 1 398 340.00
Services1 308 996.12
Consumables1 286 995.43
Portfolio investments 436 400.73
Fuel, electricity and gas 263 147.46
Chemicals 257 015.00
Livestock 53 636.36
Medical 50 000. 00
Total10 345 250.04

Whilst the Interbank FX auction sold off US$10.3 million on the first day, there was demand for US$11.4 million. This will be one thing to look out for going forward because as long as the FX auction cannot meet the demand for forex that will continue to make the parallel market they despise a necessity.

Missing info?

When the RBZ announced that this system would be coming into effect last week they made it clear that the information that would be shared would include the total number of bids and rejected bids both of which are missing from the update given by the RBZ. I’m not sure if this will be updated later but already that’s an unnecessary thing to fail to deliver.

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