RBZ Auction’s Allotments Sustains Economic Growth Priority

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By Alois Vinga

THE RESERVE Bank of Zimbabwe (RBZ) foreign exchange auction system has sustained economic growth priority by sustaining allotments toward raw materials importation and machinery and equipment among other productivity inclined needs.

A trading update released at the close of business Tuesday shows that raw material needs on the main auction received US$12.4 million, machinery and equipment US$4.1 million.

Consumables received US$1.7 million, services US$1.9 million, retail and distribution US$2.1 million, fuel, electricity and gas US$1.7 million, pharmaceuticals and chemicals US$1.3 million.

A total US$26 million was allotted on the main auction.

The allotments were similar on the small to medium enterprises (SME) platform where raw materials US$558 000, machinery and equipment received US$489 125, consumables US$393 958, services US$117 679, retail and distribution US$159 333, fuel US$79 336 among other priority allotments.

The SME platform received US$1.9 million while the grand total awarded to the two platforms reached US$28 million.

The official exchange rate closed the day at $82.67 against US$1 sustaining the stability into seven months since the establishment of the auction in June last year.

The parallel market however remains subdued as illegal dealers are struggling to push high volumes as well as shaking the stability achieved by the auction system.

Market watchers are optimistic that the current exchange rate stability, availability of foreign currency on the auction coupled with an expected bumper harvests in sight following a good rainy season is likely to increase production as the year progresses.