Foreign currency auction system to continue
THE Reserve Bank of Zimbabwe (RBZ)’s foreign currency auction system has allotted a cumulative US$4,1 billion since its inception in 2020 with the central bank indicating that the model would continue and be further liberalised as it remains a critical source of foreign currency to support the productive sectors.
RBZ Governor Dr John Mangudya has said the foreign currency auction system plays a key role in driving economic growth hence it has to be sustained to meet the needs of bonafide foreign payment requirements, including individuals and Micro, Small, and Medium Enterprises (MSMEs), while promoting financial inclusion.
In an update, Dr Mangudya said in November, US$8 190 436 was allotted to 279 beneficiaries under the Retail Foreign Exchange Auction and US$31 960 487 to 640 beneficiaries under the Wholesale Foreign Exchange.
During the month under review, total exchange payments were US$767,9 million of which US$721,1 million went to foreign currency accounts, US$40,1 million to foreign exchange auction allotments, and US$6,6 million to the interbank market.
The bulk of the retail auction allotments during November, which represented 65 percent were for raw materials (US$2,8 million), machinery and equipment (US$2,5m) with the remaining 35 percent of the allotment going towards payment of services (US$1,1 million).
Consumables accounted for US$634 666, retail and distribution (US$913 990), pharmaceuticals and chemicals (US$130 344), and paper and packaging (US$121 923).
“Total cumulative foreign exchange auction allotments since inception of the foreign exchange auction system stand at US$4 116 910 205,” said Dr Mangudya.
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
