Zim dollar sheds 2,8% against US$ at forex auction

THE Zimbabwe dollar this week slipped by 2,8 percent to trade at 108,7 against the United States dollar from last week’s exchange rate of $105,7 against the greenback at the official foreign currency trading platform.

The Reserve Bank of Zimbabwe (RBZ) allotted US$40,8 million to bidders, reflecting a 4,3 percent increase from last week’s total of US$39,1 million.

The bulk of the forex allotted at the auction platform continue to be allotted for raw material procurement, followed by machinery and equipment acquisition.

A total of US$14 million was allotted under the main auction for raw material procurement while the small to medium enterprises (SMEs) auction got US$1,8 million.

Last week, the main auction was allotted US$12,9 million for raw material procurement while the SMEs got US$2 million.

A total of US$10,5 million was allotted to the main auction for machinery and equipment requirement as compared to US$9,6 million last week.

On Tuesday SMEs received US$2,3 million for machinery and equipment procurement as compared to US$2,1 million thousand last week.

Other allocations were made for consumables such as spares, tyres and electricals, as well as retail and distribution, pharmaceuticals, chemicals, fuel, electricity and gas.

According to RBZ update, the main auction received a total of 521 bids where 117 were disqualified while the SMEs auction received 770 bids and 210 were disqualified.

A foreign exchange auction is a system when the central bank regularly sells a given amount of foreign exchange through a bidding process and buys foreign exchange in the intervening periods at the previous auction-determined rate.

This was brought into picture as a way to improve transparency and stability of the economy. — The Chronicle