RBZ allots US$28,6 million as MPS status quo is upheld

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By Alois Vinga

THE Reserve Bank of Zimbabwe (RBZ) foreign exchange auction this week allotted a total US$28,6 million, as the Monetary Policy Committee (MPC) moved to uphold the already set Monetary Policy Statement (MPS) status quo.

An update released at the close of trading Tuesday shows that on the Main Auction, a total 429 bids were received, with a total value of US$24 million.

Raw Materials bids were allotted US$11,3 million, consumables US$6,1 million, services US$1,5 million, retail and distribution US$1,4 million, pharmaceuticals and chemicals US$1,2 million,

A total of US$24 million was allotted on the platform.

On the Small to Medium Enterprises (SME) auction platform, a total 1 082 bids with a total value of US$4,5 million was allotted.

The highest rate received reached $240 and a low of $155.

Raw materials were allotted US$1,2 million, machinery and equipment US$1,5 million, consumables US$581 984, services US$541 832, retail and distribution US$340 436, electricity US$17 617, pharmaceuticals and chemicals US$162 982

A total of US$4,5 million was allotted on the platform,  with a grand total of US$28,6 million being allotted on the two platforms.

The official exchange rate reached US$1: $165,99 falling below the parallel market rate, which has since spiralled to a high of US$1: $380.

Meanwhile, the MPC committed to uphold the MPS status quo in a bid to contain the spiralling of inflationary pressures.

The MPC expressed concern over the increases of inflation from 7,7% in March to 15,5% in April 2022, and the increase in annual inflation from 72,7% in March to 96,4% in April 2022, attributed to a combination of global shocks and the pass-through effects of the recent exchange rate depreciation on the parallel market.

“The committee noted with satisfaction that the economic fundamentals have remained strong to support a stable exchange rate, as evidenced by a favourable current account balance, positive growth of the real sector, public works undertaken by the government, fiscal sustainability and a tight monetary policy stance,” the committee said in a statement.

The MPC further resolved to put in place a raft of measures to contain inflation and restore exchange rate stability.

Economist Persistence Gwanyanya described the auction results as a reflection of the central bank’s commitment to allot funds strictly from available resources.

“The results also coincide with the accelerated efforts by the central bank to clear the backlogs, with many banks having received funds in the previous week, amid plans to disburse more resources in the coming months.

“A lot is currently happening behind the scenes towards containing inflation, guided by the bank’s thrust to do more and speak little. The MPS will also keep addressing the restoration of confidence and market discipline as we expect to see these measures transforming the market for the better going forward,” he said.