Businesses access US$19,05m from forex auction

THE Reserve Bank of Zimbabwe (RBZ) has this week allotted US$19,05 million to businesses at the foreign currency auction system, a slight decrease from US$20,7 million allocated last week.

The local currency continues to lose grip against the United States dollar after it traded at US$1:1 070 as compared to US$1: 1 021 last week.

In a trading update, the central bank said after this week’s auction, a total of US$16,8 million was allotted to the main auction and US$2,3 million to Small and Medium Enterprises (SMEs).

Reserve Bank of Zimbabwe (RBZ)

The main auction accepted bids worth US$22,8 million while the SMEs platform accepted US$2,6 million.
Since the establishment of the platform in June 2020, the bulk of the foreign currency has been allotted towards the procurement of raw materials, machinery, and equipment.

A total of US$7,5 million went towards the procurement of raw materials while US$3,2 million was channelled towards the procurement of machinery and equipment in the main auction.

In the SME category, US$607 706 went towards raw materials while US$858 356 was for machinery and equipment procurement.

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.

The introduction of the foreign currency auction system, consolidation of monetary policy reforms, and fiscal incentives are some of the interventions that have aided industry recovery despite the disruptive impact of Covid-19 in the last two years. — chronicle