Foreign payments gobble US$768,4m in January
ZIMBABWE channelled US$768,4 million towards different foreign exchange payments last month alone, according to the Reserve Bank of Zimbabwe (RBZ).
Central Bank Governor, Dr John Mangudya, yesterday indicated in a public notice that the foreign currency accounts accounted for the bulk of the funds at US$684 793 691, followed by foreign exchange auction allotments’ totalling US$57 686 081 and the interbank market at US$25 962 210.
He said the publication of the foreign expenditure records was in line with RBZ’s commitment to regularly keep the public informed of developments in the foreign exchange markets.
While Zimbabwe has recently made strides towards trimming trade deficit, which is an indicator of higher reliance on importing when compared to earnings realised from exports, economic experts have stressed the need to revitalise domestic value chains and boost production, with focus on value addition and beneficiation so as to substitute imports.
“The sum of US$51 798 933 was allotted to 263 beneficiaries under the main foreign exchange auction during the month of January 2023 and the sum of US$5 887 149 was allotted to 383 beneficiaries under the small and medium enterprises foreign exchange auction during the month of January 2023,” said Dr Mangudya.
“Total foreign exchange payments for the period 1 to 31 January 2023 were US$768 441 983 broken down as follows: foreign currency account (US$684 793 691), Foreign Exchange Auction allotments (US$57 686 081) and interbank market (US$25 962 210).”
Reserve Bank of Zimbabwe (RBZ)
Dr Mangudya said the bulk of the auction allotments in January (68 percent) went for payment for raw materials (US$32 198 819) and machinery and equipment (US$6 946 146) while the remaining 32 percent of the total allotments went towards payment for services (US$5 399 967), consumables (US$4 057 556), retail and distribution (US$4 993 434), pharmaceuticals and chemicals (US$1 721 811), and packaging (US$2 368 350).
Total cumulative Foreign Exchange Auction allotments since the inception of the auction system in June 2020 stand at US$3 768 221 065, he added.
While the number of beneficiaries fluctuates slightly between months, the formal allotments have helped push the re-industrialisation momentum in line with the Government’s development drive. The Central Bank introduced the auction platform to improve productive sector accessibility to the much-needed forex.
Meanwhile, (RBZ) has allotted US$20,2 million to businesses at the Foreign Currency Auction System this week compared to last week’s US$19,1million while the local currency lost further ground against the United States dollar.
This week the Zimbabwe dollar is trading at US$1:$856 from last week’s US$1:$831. The RBZ said after Tuesday’s auction, a total of US$18,4 million was allotted for the main auction and US$1,8 million for the small to medium enterprises (SMEs) making a total of US$20,2 million.
The main auction approved bids worth US$19,7 million this week while the SMEs platform got US$1,9 million.
As usual, this week’s auction results saw the bulk of the allotment going to the procurement of raw materials followed by machinery and equipment.
A total of US$10 million went towards the procurement of raw materials while US$2,6 million was channeled towards procurement of machinery and equipment in the main auction.
In the SMEs category, US$627,827 went towards raw materials while US$497,787 was for machinery and equipment procurement.-The Chronicle
