New Zimbabwe.com

RBZ Allots US$36m Amid Notable Inflation Decline

Spread This News

By Alois Vinga


RESERVE Bank of Zimbabwe (RBZ) Tuesday allotted US$36 million towards economic productivity amid notable inflation rates decline since the auction system’s inception last year.

A trading update released at the close of trading this week shows that a total of US$31.3 million was allotted on the main auction platform.

As usual, priority went towards raw materials needs which were allotted US$12.7 million, machinery and equipment US$5.5 million, consumables US$2.3 million, services US$2 million, and retail and distribution US$2.6 million.

Fuel, electricity, and gas bids were allotted US$3.3 million, pharmaceuticals US$1.6 million, and paper and packaging US$1.15 million.

A similar priority trend was sustained on the Small to Medium Enterprises (SME) platform which was allotted a total of US$4.3 million.

The demand for foreign currency on the platform continued to increase from 642 bids submitted last week to this week’s total of 682 bids with 335 being filed on the Main Auction and 352 submitted on the SME platform.

The official exchange rate remained stable at $84.50 against US$1.

The inflation rate has been registering a significant slowdown on the back of the auction system alongside a host of other economic reforms being implemented by the government.

In the month of April, the monthly inflation rate fell to 1.58% reaching the least rate since September 2018, and for the eighth month in a row, the country saw monthly rises in the cost of living of less than 5,5% signifying the dividends of sustained stability.

Market watchers predict that the inflation rate would translate to an annual rate of 20.7% should the current rates be sustained.

Several listed companies have since credited the platform for finding a solution to volatile exchange rates which triggered inflation in the past.