RBZ Auction Turns Reliable Foreign Currency Source For SMEs

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By Alois Vinga

THE Reserve Bank of Zimbabwe (RBZ) auction platform has become a reliable source of foreign currency for the Small to Medium Enterprises (SMEs) sector, it has emerged.

A trading update released at the close of business Wednesday shows that US$6.3 million was allotted to the SMEs sector this week.

Raw material needs were allotted US$1.3 million, machinery and equipment US$1.6 million, consumables US$1.5 million, services US$378 000, retail and distribution US$497 405, fuel electricity and gas US$218 126, pharmaceuticals US$349 062, paper and packaging US$320 938.

This week’s total figure increased from US$6.1 million allotted to the SMEs last week and a fortnight ago, the sector was allotted US$5 million.

Commenting on the allotments, top economist Naome Chakanya said the surge was a reflection of economic activity in the country.

“Our economy is highly formalised and due to the increasing economic activities after Covid-19 lockdowns, there is more demand for foreign currency by the SMEs.

“The difference between allotments on the two auctions shows that there is a need to relax requirements for SMEs who may not have the requirements to access foreign currency on the auction,” she said.

Meanwhile, a total 795 bids were submitted, signifying increasing demand for foreign currency on the auction system.

A grand total of US$38.1 million was allotted to both the main and SMEs auctions which received US$31.8 million and US$6.3 million respectively.

On the main auction, raw materials were allotted US$13.3 million, machinery and equipment US$5.1 million, consumables US$2.7 million, services US$2.1 million, retail and distribution US$2.8 million, fuel electricity and gas US$1.7 million, pharmaceuticals US$2.2 million, paper and packaging US$1.4 million.

The official exchange rate remained stable at $84.72 against US$1.