Low-key auction after the holiday

LOW volumes marked yesterday’s foreign exchange auction at the Reserve Bank of Zimbabwe and in the absence of any other reason, it appears many bidders were not ready for the first business day after a fourday public holiday.

Bidders would need to have got their bids in on Thursday last week, that being the previous banking day to yesterday, and while most of the big raw material bidders must have been on time many others were not.

The rate stayed very close to last week, strengthening a whisker to $84,3970 from $84,4001, or by roughly a third of a Zimbabwean cent. This tended to balance the above average jump last week of 28 Zimbabwean cents.

Maximum and minimum bids stayed within the $87 to $82 range for the main auction, but with the SME auction seeing a high bid of $87,5. All valid bids, which were all within these ranges, were allotted their foreign currency in full.

But the number of bids fell, to 190 valid bids with 36 invalid bids, on the main auction and 144 valid bids, with 27 invalid bids, on the SME auction. This saw the total allotted on the main auction fall to US$23,191 million and on the SME auction to US$2,06 million.

The reduced number of bidders saw the raw material allotment become even more dominant at US$11,05 million on the main auction, almost half the total, with machinery and equipment at US$4,67 million.

The SME auction showed its typical distribution of bids with US$533 000 for raw materials, US$508 000 for consumables and US$387 000 for plant and equipment.