RBZ foreign currency auction increases exchange rate to 1:72

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By Alois Vinga

THE Reserve Bank of Zimbabwe (RBZ) foreign currency exchange auction system Tuesday increased the official Zimbabwe dollar exchange rate against the US dollar to 1:72.

A trading update released by the central bank at the close of business shows that a total US$14.8 million was allotted on the day with the highest exchange rate offered being ZWL$82 and a least rate of ZWL$55.

“The least accepted rate during the day was ZWL$70. However, the average weighted rate settled at ZWL$72.14,” read the update.

Out of the 291 bids made during the course of the auction, the total bids amount stood at US$20.3 million.

51 bids were disqualified for entering the auction for speculative reasons despite having positive balances at hand.

Allocations made favoured stimulating industrial productivity which saw US$7.4 million going towards raw materials and US$2.3 million going towards machinery and equipment.

The retail and distribution sector received US$1,2 million, consumables including spares, tyres, and electricals gobbled US$ 1,1 million, pharmaceuticals and chemicals US$696 000.

Services loans, dividends and disinvestments was allocated US$752 000, paper and packaging US$615 000 and Fuel, Electricity and Gas received US$640 000.

“It was noted that players are still ignoring the clear ground rules by submitting bids that do not qualify. A resolution was passed to consider imposing a fine in US dollars for participants who come to the auction with dirty hands,” a finance ministry official said.