February forex payments hit US$595,4m — RBZ

ZIMBABWE channelled US$595,4 million towards different foreign exchange payments last month alone, according to the Reserve Bank of Zimbabwe (RBZ).

Reserve Bank of Zimbabwe (RBZ)

Foreign currency accounts accounted for the bulk of the funds at US$501 450 511, followed by foreign exchange auction allotments for the month at US$76 616 769 and the interbank market at US$17 337 881.

Central Bank Governor, Dr John Mangudya, revealed this in a public notice yesterday where he stated that 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 the 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 a focus on value addition and beneficiation so as to gain competitive advantage, which will strengthen the local currency.

“The sum of US$68 555 607 was allotted to 390 beneficiaries under the main foreign exchange auction during the month of February 2023 and the sum of US$8 061 162 was allotted to 555 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 28 February 2023 were US$595 405 161 broken down as follows: foreign currency account (US$501 450 511), Foreign Exchange Auction allotments (US$76 616 769) and interbank market (US$17 337 881).”

Dr Mangudya said the bulk of the auction allotments in February (67 percent) went for payment for raw materials (US$39 093 024) and machinery and equipment (US$12 033 775) while the remaining 32 percent of the total allotments went towards payment for critical services (US$6 787 684), consumables (US$5 640 886), retail and distribution (US$8 126 239), pharmaceuticals and chemicals (US$2 255 633), and packaging (US$2 660 337).

Total cumulative foreign exchange auction allotments since the inception of the auction system in June 2020 stand at US$3,84 billion, 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, the RBZ allotted US$19,8 million to businesses at the Foreign Currency Auction System this week compared to last week’s US$ 18,1 million while the local currency slightly lost its value to the greenback.

This week the Zimbabwe dollar is trading at US$1: $912,6 from last week’s US$1:$907,9. The RBZ said after Tuesday’s auction, a total of US$17,3 million was allotted for the main auction and US$2,5 million for the SMEs.

The main auction approved bids worth US$17,4 million this week while the SMEs platform got US$2,6 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$9,6 million went towards the procurement of raw materials while US$2,4 million was channelled towards the procurement of machinery and equipment in the main auction.

In the SMEs category, US$742 403, 42 went towards raw materials while US$730 643,67 was for machinery and equipment procurement. – -chronicle.cl.zw