Auction system allocation stands at US$4bn

THE Reserve Bank of Zimbabwe (RBZ) foreign currency auction system has allotted a cumulative US$4 billion since its inception in 2020 with the central bank indicating that the system shall continue in operation and will be further liberalised as it remains a critical source of foreign currency for the economy.

In an update, RBZ Governor Dr John Mangudya said in October, US$8 549 370 was allotted to 248 beneficiaries under the Retail Foreign Exchange Auction and US$56 742 924 to 773 beneficiaries under the Wholesale Foreign Exchange.

In the month under review, total exchange payments were US$840 million of which US$700 million went to foreign currency accounts, US$65 million to foreign exchange auction allotments, and US$5 million to the interbank market.

The bulk of the retail auction allotments during October which represented 85 percent were for raw materials (US$2 million), machinery, and equipment (US$2m) with the remaining 42 percent of the allotment going towards payment of services (US$1,2 million).

Consumables accounted for US$799 142, retail and distribution (US$1 million), pharmaceuticals and chemicals (US$181 086), paper and packaging (US$218 741) and fuel, electricity, and gas accounted for US$146 523.

The central bank introduced the auction platform to improve productive sector accessibility to the much-needed forex.

The auction system continues to provide affordable and easily accessible foreign currency to the productive sector in a bid to reduce production costs and promote industrial growth as this reduces sourcing of forex from the illegal forex market, which manipulates exchange rates.-chronicle