By Alois Vinga
TOP economists have hailed the Reserve Bank of Zimbabwe (RBZ) Foreign Exchange Auction surge in allotments will preserve the Zimbabwe dollar value, cut back on wasteful exports and ease the outflow of foreign currency.
Speaking to NewZimbabwe.com Business in separate interviews Tuesday economists Prosper Chitambara and John Robertson expressed optimism on current trends obtaining at the auction.
Their remarks came shortly after the RBZ had allotted a total US$46.9 million on both the Small to Medium Enterprises and Main Auction Platforms Tuesday, up from US$35 million allotted last week.
“The surge is a positive development signifying improvement in economic activities which is translating to a surge in demand for foreign currency,” said Chitambara.
“The sustained trend of allotting more resources for raw materials, machinery and equipment needs has the potential to transform the productive levels for the better.”
He added that if the system is well-managed, the auction system had the potential to transform the economy from high consumption to becoming production based.
Meanwhile, Robertson said the improved allotments signify a surge in exports and underscored the development will strengthen the local currency.
“The increases will prevent the Zimbabwe dollar from weakening as the surge in allotments becomes a buffer. The high allotments for raw materials and machinery will motivate local manufacturers to improve production.
“In the long-term imports will be cut down leading to huge savings of foreign currency while creating more resources for the auction platform,” he said.
Meanwhile, at the close of trading this week, the official exchange rate weakened slightly to $85.24 against every US$1, up from $85.04 recorded last week.
Raw materials, machinery and equipment were allotted US$14. 4 million and US$8 million, respectively.
A similar trend was sustained on the SME auction where US$1.8 million and US$1.9 million was allotted for raw materials and machinery.