RBZ Auction allots US$13,6 million with Zim dollar closing at ZWD613

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By Alois Vinga

THE Reserve Bank of Zimbabwe (RBZ) foreign exchange auction this week allotted a total of US$13,6 million with the official exchange rate continuing to inch towards to parallel market position.

A trading update released at the close of business Tuesday shows that the official exchange rate moved to US$1:ZW$ 613,36, down from the ZW$604,25 recorded last week.

Market watchers believe will go a long way towards closing the parallel market exchange rate currently standing at US$1:700.

Commenting on the results, economist Persistence Gwanyanya said the results are a clear confirmation that the market is converging towards sustainability.

“It also proves the effectiveness of the economic measures implemented by the treasury and the RBZ for most part of the year,” he said.

“To support this, treasury this week went further to disclose the matters around the payment of contractors as well as disciplinary measures being implemented on errant contractors and their accomplices.

He however challenged businesses to conform to changes and adjust prices accordingly to reflect the current economic fundamentals.

“Pricing models based on arbitrage and speculation are fast becoming a thing of the past. It is time businesses complied otherwise they risk going out of business due to depressed demand as citizens pursue cheaper alternatives,” he said.

Meanwhile, on the Main Auction platform, a total US$11,5 million was allotted while on the SME Auction platform US$2 million was allotted to give a grand total of US$13,6 million.

The allotments were tilted in favour of meeting the productivity objective with  raw materials US$5, 4 million, machinery and equipment US$2,8 million, consumables US$781 648, Services US$1 million, Retail and distribution US$766 563, pharmaceuticals and chemicals US$353 813, paper and packaging US$134 546.

A similar trend was sustained on the Small to Medium Enterprise (SMEs) Auction where a total 230 bids were received with a total value of US$2,1 million.