By Alois Vinga
THE Reserve Bank of Zimbabwe (RBZ) Tuesday allotted a total US$32,8 million through the Foreign Exchange Auction system as the Confederation of Zimbabwe Industry (CZI) threw its weight behind the central bank’s recently introduced inflation containment measures.
A trading update released at the close of the weekly auction shows that 362 bids were received on the Main Auction with a total value of US$27,4 million .
Raw Materials needs earned US$12,7 million , machinery and equipment US$6,1 million, Consumables US$2,2 million, services US$1,9 million, retail and distribution US$2,2 million, pharmaceuticals and chemicals US$1,3 million, paper and packaging US$679 268.
A similar trend was sustained on the SMEs Auction where 987 bids were accepted with a total value of US$5,3 million .
Raw material needs were supported to the tune of US$1,4 million , machinery and equipment US$1,8 million , consumables US$741 667, services US$508 531, retail and distribution US$454 214.
The allotments on the platform amounted to US$5,3 million.
The official exchange rate moved US$1: $145 up from the rate of US$1:$142,42 reached last week.
The CZI president, Kurai Matsheza has welcomed developments at the auction saying this week’s measures which saw the bank policy rate being reviewed upwards from 60% to 80% among other policy initiatives.
“These measures are a step in the right direction and as an industry we await to see whether they will be implemented accordingly .Our hope is that if fully and effectively implemented they will go a long way to resolving the obtaining problems,” he said.
“You see in turbulent times you have to analyse where inflation is originating from. The present circumstances present choosing between a rock and a hard place which makes the idea of keeping the rates lower and pave way for inflation triggered by market abuses unworkable. “In these circumstances therefore, the stipulated measures are indeed the best way to control the situation,” he said.
Matsheza added that the industry is optimistic that measures placed on the currency policy front, if allowed to be dependent on pure market forces as far as the exchange rate is concerned, will work.