By Alois Vinga
CONFEDERATION of Zimbabwe Industries (CZI) has hailed the Reserve Bank of Zimbabwe (RBZ) for ensuring realistic stability as the Zimbabwe dollar depreciated by 12,4% on the auction platform, swiftly closing the gap between the parallel market rate.
The remarks come a few weeks after the monetary authorities clashed with CZI on the direction to be taken in preserving the Zimbabwe dollar value as parallel market exchange rates rose to a high of US$1: ZW$400 with the official exchange rates then hovering around US$1: ZW$165.
President Emmerson Mnangagwa proceeded to enact a raft of measures such as the temporary ban on extension of loans, which has since been lifted.
A trading update released at the close of this week’s auction trades shows that the official exchange rate reached US$1: ZW$290,83 up from US$1: ZW$258,54 recorded last week, recording a 12,4% decline.
On the main auction platform, 339 bids were accepted, with the highest bidding rate received reaching a high of US$1: ZW$359 and a low of US$1: ZW$280.
Raw materials needs were allotted US$10,6 million, machinery and equipment US$5 million, consumables US$1,2 million, services US$971 000, retail and distribution US$1,2 million.
A total US$20,6 million was allotted on the platform.
On the SME Auction, 484 bids were accepted, with a total value of US$8,6 million.
Raw materials needs were allotted US$1,2 million, machinery and equipment US$1,6 million, consumables US$450 609, services US$301 132, retail and distribution US$338 643 with a total US$4,4 million being allotted on the platform.
A grand total of US$25 million was allotted on the two platforms.
“Our take as an industry is that the pronouncements made by President Emmerson Mnangagwa early this month are being lived up to and seem to be working. What we see currently is that the movement of the exchange rate is now being determined by the bidders themselves, which is a welcome development,” CZI’s Kurai Matsheza said.
“We are yet to check the commitment on the settlement of the auction allotments within the promised fourteen days. However, the early indications are quite good.”
Economic analyst, Persistence Gwanyanya, said the results are an indication of the movement towards the attainment of exchange rates equilibrium.
“Currently, the RBZ is seized with the clearance of auction backlogs which, when combined with ongoing efforts to mop up excess liquidity, will result in stability. The focus is on transforming the recently experienced challenges and taking the economy forward,” he said.