By Alois Vinga
THE RESERVE Bank of Zimbabwe (RBZ) has managed to sustain foreign currency supplies allotting a total US$34.6 million this week.
Since the auction kicked off this year, amounts allotted have been much higher compared to last year’s figures.
The central bank has been allotting amounts hovering around US$35 million signifying increasing confidence in the market.
An update released at the close of trading Tuesday shows that US$31.9 million was allotted on the main auction with raw materials and machinery needs receiving US$14.2 million and US$4.5 million respectively among other allotments.
The Small to Medium Enterprises platform received a total US$2.6 million with main priority going towards raw materials, machinery and equipment among other items.
The official exchange rate reached $83.37 against US$1.
This comes as the parallel market is paying between $90 and $100 for every US$1 but remains incapacitated to pull high volume transactions as compared to the auction system.
International best practices state that there should be a 10% difference between the official and black market rates.
Economist Persistence Gwanyanya told NewZimbabwe.com Business the latest auction is a semblance of forward planning by the RBZ.
“The central bank exercised foresight by mobilising more foreign currency through the policy which directs exporters to surrender 40% of their foreign currency. On a positive note, banks have been directed to transfer all the allotted US$ immediately after the auction,” he said
He said this marked a departure from the delays which were experienced towards the end of 2020.
“It’s certain that the auction will continue to run smoothly without clichés before the commencement of the tobacco selling season which will further spur the market,” Gwanyanya added.