Industry confirms backlog clearance as RBZ Auction allots US$13, 8 million

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By Alois Vinga

CONFEDERATION of Zimbabwe Industries (CZI)  has acknowledged that the Reserve Bank of Zimbabwe (RBZ)  Foreign Exchange Auction has cleared backlogs, expressing optimism that parallel market rates will take a dip if trend is maintained.

The remarks also come against a backdrop where the weekly allotments on the auction platform hit US$13,8 million.

Last week, the central bank announced that all backlogs which had not been paid to companies’ despite being allotted for periods dating back to 2022 were cleared.

Several companies had raised numerous complaints in recent months over the non – payment of the backlogs which they blamed as one of the reasons prompting industry to scavenge for foreign currency on the parallel market, a tendency which has triggered inflation hikes in the past.

Speaking to this week, CZI president, Kurai Matsheza acknowledged that all companies with backlogs on the Auction platform received their dues last week.

“We can confirm that indeed the backlogs were cleared. We welcome that development and urge the authorities to maintain that good position for all the time going forward,” he said.

The industry lobby group leader said the backlogs were straining capital positions of industry and hailed recent clearance saying it eases that situation and it bodes well for productivity.

“However, sustained productivity will depend on how easy it will be to access forex for their future needs. Therefore foreign currency availability is still a necessity.

“The exchange rate is driven by other fundamentals such as money supply. If money supply is controlled together with other measures, exchange rate stability may be achieved,” said Matsheza.

Meanwhile, weekly allotments on the Auction market reached US$13,8 million out of which bids on the Main platform  were tilted in favor of stimulating productivity with raw materials receiving  US$6,9 million  , machinery and equipment  US$1,2 million , consumables US$627 949 , services US$1,4 million , retail and distribution US$1,2 million , pharmaceuticals and chemicals US$458 282, paper and packaging US$576 379.

A similar trend was seen on the SME platform where raw materials were allotted US$502 062, machinery and equipment US$318 370 and consumables US$196 015.

The official exchange rate depreciated to US$1: ZW$779 edging closer to the parallel market rate which has tumbled to between ZW$800 up to a high of ZW$1 000 for every US$1.