Industry calls for Zim$ widespread usage as RBZ Auction allots US$17, 5 million

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By Alois Vinga

INDUSTRY has called for the widespread usage of the Zim$ as the Reserve Bank of Zimbabwe  (RBZ)  allotments tilted in favor of supporting local industry viability  this week reached a high of US$17,5 million.

A trading update released at the close of trading this week shows that on the Main Auction platform a total of 174 bids were accepted with allotments going towards production related needs such as  raw materials which received US$7,8 million , machinery and equipment US$2,8 million, consumables, US$1,2 million, services US$1,3 million among others.

A similar trend was sustained on the SME Auction where the total US$2, 1 million allotted went towards production related needs.

The official exchange rate closed the day at ZW$892, 63 against the greenback.

The developments come at a time when the Confederation of Zimbabwe Industries (CZI)  has commended the current inflation decline trends amid predictions for more positive outcomes going into the year.

“The year 2023 has commenced on a positive note, with the inflation gains made in the second half of the year 2022 continuing into 2023. The continued downward trend of month-on-month inflation, which commenced in July 2022 and had threatened a reverse in December 2023,” the latest CZI inflation tracking report said.

The industry lobby group however said while controlling ZWL$ inflation remains one of the strategies to enhance the Zim$ store of value function, there is urgent need to put in place measures aimed at encouraging the widespread usage of the local currency.

“Migrating certain taxes to be payable only in local currency. PAYE would be a good start as this would bring many institutions including foreign missions, into the foreign exchange market as sellers.

“Smoothening of Government Ministries’ payment methods, to avoid liquidity disruptions from simultaneous payments at some specific point due to delays,” said CZI.