RBZ forex auction allots US$25 million to firms as Zim-dollar strengthens

RESERVE Bank of Zimbabwe (RBZ) 15th foreign exchange auction Tuesday allotted a total US$24.5 million worth of foreign currency as the Zimbabwe dollar gained by ZW$0.05 cents against the US dollar.

At the close of the auction, the exchange rate stood at ZWL$81.44 against US$1, slightly lower than the exchange rate of ZWL$81.49 recorded last week.

Last week, the Zim-dollar firmed up by ZWL$0.21 cents to close the auction at ZWL$81.49 from the previous week’s ZWL$81.70.

The latest gains mark a record four times since the local dollar first gained against the US dollar when it retreated from a high of ZWL$83.32.

A trading update released by the central bank at the close of trading shows that a grand total of US$24.5 million was awarded both to the main and SMEs auctions to boost productivity to companies across the country’s key economic sectors.

While the amount is a bit lower to the US$30 million allotted last week, it remains the second highest figure allotted since the commencement of the auction in June this year.

Allotments on the main auction shows that of the total US$23 million allotted, priority went towards raw materials which were allotted a total US$8.6 million, machinery and equipment US$2.9 million, consumables US$3.1 million and services covering loans, dividends and disinvestments earning US$2.4 million.

The retail and distribution sector was allotted US$2.1 million, fuel, electricity and gas US$1.48 million, pharmaceutical and chemicals US$1.7 million and paper and packaging receiving US$463 347.

The highest bidding rate reached a high of ZWL$86 and a low of ZWL$78 on both auctions.

Out of the 233 bids received, only 22 were disqualified for breaching the auction’s rules.

On the SMEs auction, US$277 342 was allotted for raw materials, US$326 567 machinery and equipment, consumables US$342 354, services loans and dividends US$138 376, retail and distribution US$153 350.

The SME auction received 129 bids out of which six were disqualified.

Since the inception of the RBZ foreign exchange auction, the exchange rate has remained stable leading to a positive impact on prices which have also maintained stability.

The smooth function of the auction has also been supported by the measures taken by the central bank which saw the tightening of screws on mobile platforms which had been hijacked by illegal foreign currency dealers whose activities distorted the market.-newzimbabwe.com