The Zim$ official exchange rate has converged with the parallel market premiums while at the same time falling within internationally acceptable margins the Reserve Bank of Zimbabwe (RBZ) Foreign Exchange Auction latest results have revealed.

A trading update released at the close of business Tuesday shows that the official exchange rate deteriorated by 3% to close the day at US$1: ZW$ 856.

Considering that the central bank allows traders to charge 10% more or less above or below the stipulated exchange rates, the implication is that going forward the official rate can hit a maximum of ZW$935 against the greenback in a development signifying convergence of the two exchange rates.

Currently the parallel market rates are generally hovering around US$1:ZW$950.

Speaking to NewZimbabwe.com, economist Persistence Gwanyanya who also sits in the RBZ Monetary Policy Committee (MPC) concurred that the two rates had converged.

"We have reached convergence which is a key ingredient to economic stability. Interestingly, allotments at US$20,2 million made this week is an indication that the platform is stretching out to respond to the needs of the wider population and rising demand in the economy," he said.

He said such developments coupled with already existing measures to ring fence the local currency is set to further strengthen the economy especially after considering that currently, no backlogs are accumulating at the RBZ Auction.

Meanwhile, the trading update shows that allotments on the Main Auction sustained the tradition of supporting productivity with raw materials needs getting US$10 million, machinery and equipment US$2,6 million, consumables US$1 million, services US$1,6 million, retail and distribution US$2,1 million services US$1,6 million Retail and distribution US$2,2 million

On the SME Auction platform, 266 bids were received with US$1,8 million being allotted on the platform.