RBZ Currency Auction Injects $32 Million

By Alois Vinga

The Reserve Bank of Zimbabwe (RBZ) currency auction this week allocated US$32.04 million to support key productive sectors as the market expects recently announced measures to go a long way towards stop the volatility of the parallel market.

A trade update released at the close of business on Tuesday shows that in the main auction a total of 389 bids were received worth US$28.3 million.

Raw material requirements have been allocated $12.4 million, machinery and equipment $6.5 million, consumables $2.3 million, services $2 million, retail and distribution 2 .6 million, pharmaceuticals and chemicals 1.2 million. donate a total of $28.3 million.

In the small and medium enterprise auction, a total of US$3.7 million was allocated, with raw material requirements receiving US$999,034, machinery and equipment US$1.3 million, consumables US$464,584, services US$390,693, retail and distribution US$315,999. .

The grand total allocated to the two platforms reached US$32,043,311.

The exchange rate depreciated by 0.9% from the 1:148.87 USD recorded last week to the current rate of 1 USD:150.21 USD reached this week.

In the parallel market, exchange rates nearly doubled, with dealers paying $250 for US$1 while selling every US$1 up to $300.

However, market watchers are optimistic that the measures recently adopted by the central bank, which saw the increase in interest rates up to 80% coupled with the acceleration of the elimination of excess liquid , will greatly reduce Zimdollar supplies in the parallel market and reduce the deterioration of the exchange rate.

Commenting on the weekly allocations, economist Persistence Gwanyanya said the results will soon reflect the willing seller willing buyer arrangement approved by the central bank which will also go further to limit the disparity between the two exchange rates.

“You will also note that for the past few weeks, awards have hovered around US$32 million as opposed to the originally set targets of US$40 million. This was prompted by the fact that the government no longer supports the auction system due to its current US dollar salary commitments,” he said.

Gwanyanya said the central bank was simply allocating what it had in its coffers and expressed hope that in future the willing seller, willing buyer initiative will unlock more foreign currency for auctions. and unlock revenue streams.

“These measures, together with the goal of clearing the main auction backlog before the end of April, will strengthen the auction system,” he added.