New Zimbabwe.com

RBZ foreign currency auction increases exchange rate to 1:83

Spread This News

By Alois Vinga


THE Reserve Bank of Zimbabwe (RBZ) foreign exchange auction Tuesday increased the official rate to 1:83 against the United States dollar, maintaining a very close range with parallel market rates.

In trading update released at the close of trading Tuesday, the central bank said a total US$13.6 million was allotted on the main auction system in which formal large corporates trade.

The main segment offered the highest rate of ZWL$88 and the lowest rate of ZWL$80.

Total number of bids accepted amounted to US$13.6 million and out of the 113 bids received, 17 were disqualified for violating clearly set rules of approaching the auction for speculative reasons.

The central bank prioritised companies intending to purchase raw materials after allotting US$5.2 million for that cause in a bid to boost productivity and revamp the economy.

Machinery and Equipment needs were allotted US$2.8 million, consumables US$1.9 million, pharmaceuticals and chemicals US$1.2 million, services US$946 000.

Retail and distribution including food beverages received US$471 000 while fuel, electricity and gas received US$671 000.

Trading at the Small to Medium Enterprises (SMEs) foreign currency auction saw a total US$517 000 being allotted. The SMEs section was opened a few weeks ago in a bid to cater for smaller businesses.

The highest bid offered is this segment was ZWL$85 and a low of ZWL$78.

The number of bids received totalled 56 with 16 bids being disqualified for breaching set rules.

The new official rates are now maintaining a close range to parallel market rates currently offering premiums ranging between ZWL$80 and ZWL$85 cash for every US$1.

Through Ecocash, the parallel market is offering 1:90 but most illegal traders have been lately experiencing acute cash flow challenges incapacitating them from pushing large amounts of money following recent disciplinary measures effected by the central bank on the platform.

Market watchers are however optimistic that the auction system will stabilise the economy and the local currency if the current momentum is sustained through professionalism and transparency.