Zimbabwe’s currency – the Zimbabwe dollar – has depreciated further to 72.1 to the United States dollar, down 4.7% from 68.8 following the fifth foreign currency auction today.

The country’s monetary authorities introduced the Dutch auction system last month in a bid to determine an effective exchange rate after the failure of an earlier peg.

Today’s auction, which was held virtually due to increasing cases of Covid-19 saw total at 290.

51 of these bids were rejected.

The highest bid was 82.17, while the lowest bid was 55. The lowest accepted rate was 70.

A total of US$14.8 million was allotted, with the bulk of it going to industry, circa US$9.7 million (which went to raw materials and machinery & equipment).

Indications are that the monetary authorities are planning to impose a US dollar fine on participants trying to “beat the system.”

Although prices have somewhat stabilized since the resumption of the auction system five weeks ago, it is notable that some companies are still charging according to the black market rate although they are accessing their foreign currency requirements from the auction system.

The authorities have said they are aware of such speculative behavior and will soon put measures in place to contain it.