RBZ foreign exchange liberalisation measures bear fruit

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By Alois Vinga

THE Reserve Bank of Zimbabwe (RBZ) this week allotted US$30,3 million notable impact of recently announced  foreign currency liberalisation measures on the exchange rates market.

A trading update released at the close of business Tuesday shows that on the  Main Auction , 417 bids were received out of which , raw materials were allotted  US$12,4 million , machinery and equipment US$6,2 million, consumables US$1,7 million, services US$1,7 million retail US$2 million and pharmaceuticals US$1 million .

The total allotted on the main auction platform reached US$26 million.

On the SME Auction, a total 1 122 bids were received with a total value of US$4,2 million.

Raw materials on the platform were allotted US$1 million, machinery and equipment US$1,4 million, consumables US$489 801, services US$603 222, retail and distribution US$363 293, pharmaceuticals and chemicals US$184 609, paper and packaging US$135 306.

A grand total of US$30,3 million was allotted on the two platforms.

The official exchange rate closed the day at US$1 : ZW$155,14 up from US$1: ZW$145,87 recorded last week.

Despite the parallel market deteriorating to a high US$1: ZW$350 this week, economic analyst , Doctor Prosper Chitambara hailed the development as an indicator of the recent measures to further liberalise the foreign currency trade  employed by the central bank kicking in.

“Rates on the parallel market have obviously deteriorated due to the liberalisation of the foreign currency market which allowed banks to facilitate trades on a willing seller, willing buyer basis.

“The greater the extent to which the exchange rate reflects market dynamic forces of demand and  supply , the greater the confidence in the auction system. Such forces are critical for the attainment of macro-economic stability in the long term,” he said.

Chitambara added that sustained trends of hefty allotments towards raw materials, machinery and equipment over consumptive needs will go a long way to revamp the country’s productivity base.