THE Reserve Bank of Zimbabwe (RBZ) has announced an advance US$15 million allocation to bidders at the official foreign currency auction system starting next week.
The pre-announced envelope is in line with the measures adopted by the Treasury to stabilize the exchange rate through fine-tuning the auction system.
RBZ Governor Dr John Mangudya said the announcement is in line with the bank’s new policy of making foreign exchange auction allotments public.
“In line with the refinement of the foreign exchange auction system and the subsequent Exchange Control Circular to authorised dealers (Circular No. 03 of 2023 dated May 12, 2023), the Reserve Bank of Zimbabwe would like to advise the public that the amount available for allotment for May 23, 2023 will be US$15 million,” he said in a statement.
“Going forward, the bank will continue to advise the public of the weekly amounts available on offer under the Foreign Exchange Auction System through authorised dealers.”
Economists and industrialists have been calling for the central bank to finetune the auction system stressing the need for the platform to be effective and efficient so that it continues to benefit the productive sector.
The issues were raised following the growing numbers of backlogs, which ended up disadvantaging the productive sector following delays in forex allotment.
The foreign currency auction system was introduced in June 2020 in a bid to provide affordable forex for the productive sector as well as maintain stability for the local currency.
Since its commencement, the platform has allotted a cumulative amount of more than US$3 billion.
Meanwhile, RBZ has allotted US$14,4 million to all bids during this week’s auction system compared to US$16,3 million last week.
The bulk of the allotted amount continues to go towards the procurement of raw materials, machinery, and equipment by both small and medium enterprises and the main auction.
However, the local currency also continues to shade its value towards the greenback, which has seen it trading at US$1:$1 404 from US$1:$1 212 last week.
There is a huge margin between the official exchange rate and the parallel market rate, which is hovering around US$1:$2 800. – The Chronicle
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