BUSINESS entities accessed US$43 million from the Reserve Bank of Zimbabwe (RBZ)’s foreign currency auction system towards meeting different foreign exchange obligations last month.
The improved access to foreign currency through formal channels has been credited for enhancing domestic industrial activity, which is assisting the country to trip imports and expand export earnings.
Local businesses require easy access to forex in order to facilitate procurement of key raw materials, critical equipment and spare parts from regional and international source markets.
RBZ governor, Dr John Mangudya, said a total of US$39,1 million was allotted to 139 beneficiaries under the main foreign exchange auction during the month of October 2022 while US$4,6 million was allotted to 296 beneficiaries under the Small to Medium Enterprises segment during the same period.
“The bulk of the auction allotments during the month of October 2022 (67 percent) was for payment for raw materials (US$18 187 311) and machinery and equipment (US$11 283 105), with the remaining 33 percent of the total allotments going towards payment for consumables US$2 720 261), services (US$2 330 865), retail and distribution (US$1 199 247), pharmaceuticals and chemicals (US$7 709 204) and packaging (US$420 170),” said Dr Mangudya.
The cumulative foreign exchange auction allotments since the inception of the foreign exchange auction system stand at US$3,6 billion.
The Central Bank introduced the auction platform in June 2022 to improve accessibility to the much-needed forex to companies or businesses in the productive sectors such as mining, agriculture, as well as agro-industrial sector, which need foreign currency to import critical raw materials, consumables, machinery and equipment, among others.
Meanwhile, the RBZ has announced that the introduction of gold coins as part of a plethora of interventions to stabilise the economy is set continue with the bank set to start disbursing 4 500 smaller units of Zimbabwe’s Mosi-oa-Tunya gold coins to banks tomorrow ahead of planned release of the bullion coins in the market on Tuesday next week.
The monetary authorities are releasing small gold coins so that ordinary citizens with excess liquidity can also invest in an alternative store of value other than the US dollar, the same way big investors were awarded an opportunity.
In July this year, the RBZ introduced bigger denominations of gold coins as part of measures to ensure investors, mostly cash-rich institutions, have alternative means to preserve value. – The Chronicle
