Zimbabwean Dollar Drops Slightly Against USD At RBZ Auction

The Zimbabwean dollar slightly depreciated against the United States dollar (USD) at the Reserve Bank of Zimbabwe (RBZ) wholesale foreign exchange auction held on August 1, 2023. According to the RBZ, the USD was sold at ZW$4,542.3710, compared to ZW$4,505.4232 on July 25. The majority of the foreign currency was used to purchase raw materials, followed by machinery and equipment.

The Zimbabwean dollar has been steadily strengthening against the USD in recent weeks, but the latest results indicate a shift in the trend. The strengthening of the Zimbabwean dollar has been attributed to the government’s implementation of various measures to stabilize the economy and the local currency.

One such measure includes the restriction of foreign currency in local transactions, with the Zimbabwean dollar being the sole legal tender for some domestic transactions such as taxes. This has resulted in a reduction of the money supply in the market, although some analysts have accused authorities of hoarding the Zimbabwean dollar to create an artificial shortage.