Forex auction is market driven, Minister Ncube

FOREIGN currency auctions are market driven and represent an expression of choice in the trade of the hard currency, a development that has stabilised the exchange rate in Zimbabwe.

This was said by Finance and Economic Development Minister Professor Mthuli Ncube while responding to questions in the National Assembly last week.

Prof Ncube said the Government could not use any other foreign exchange rate in settlement of its obligations in Zimbabwe since that would undermine the auction system.

Kambuzuma MP Mr Willias Madzimure (MDC Alliance) had said the 83,5 rate to US$1 being paid to tobacco farmers was unfair given that farm implements and other related goods were indexed at the parallel market rate which was higher.

However, in response, Prof Ncube dismissed the assertions by the MDC MP.

“The auction system is not fixed; neither is it manipulated. You chose your exchange rate and we publish the highest bids and lowest together with the average. As a result, the Zimbabwean dollar is now stable and gaining value.

“This is because the auction system is market and choice oriented as it is driven by market forces. Can you imagine a market where you choose your price? You cannot be freer than that,” said Prof Ncube.

He said the Government could not pay its obligations using any other rate because doing so would be undermining the auction rate system.

Responding to another question, Transport and Infrastructural Development Minister Felix Mhona said Government had introduced a mechanism to monitor projects and would embark on a massive road rehabilitation.

Lands, Agriculture, Agriculture, Fisheries, Water and Rural Resettlement Minister Anxious Masuka said Government had accelerated dam construction as part of deliberate efforts to harness water.

Three dams were set to be commissioned this year out of about 10 being constructed.-herald.cl.s