Forex auction system disburses US$3 billion

THE Reserve Bank of Zimbabwe has allocated close to US$3 billion to firms through the auction system since the auction started in June 2020, a latest update shows.

Giving an update on monthly allocations, central bank governor, Dr John Mangudya said to date the Foreign Exchange Auction System has disbursed about US$3 billion.

Last month about US$151,9 million was allotted to 886 firms in the main Foreign Exchange auction while 2 371 beneficiaries shared US$32,2 million under the SMEs Foreign Exchange auction.

The bank has since published the list of companies that benefitted in both the main foreign exchange auction and the SMEs foreign exchange auction.

Dr Mangudya said total foreign exchange auction allotments for the period January 2022 to March 2022 amounted to US$402,5 million bringing the cumulative allotments since inception of the Foreign Exchange Auction System to about US$3 billion.

He said in March, 64 percent of the total allotted forex was for payment of raw materials amounting to US$70,6 million and machinery and equipment US$47,9 million, with the remaining 36 percent of the total allotments going towards payment for retail and distribution, consumables, services, pharmaceuticals and chemicals, packaging and fuel, electricity and gas.

Government introduced the forex trading system in June 2020 as part of measures to stabilise the exchange rates and improve businesses’ access to forex.

The forex auction Is conducted on Tuesdays and businesses share more than US$30 million weekly.

Meanwhile, the local currency this week slipped by 2,9 percent to trade at $150,2 against the United States dollar from last week’s exchange rate of $145,9 against the green back. The central bank allotted US$32 million to bidders reflecting a drop against last week’s allotted amount of US$32, 8 million.

As been the tradition, the bulk of the foreign currency allotted went towards procurement of raw materials.-The Chronicle