RBZ Foreign Exchange Rate Increases To 1:80

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By Alois Vinga

THE Reserve Bank of Zimbabwe (RBZ) foreign exchange auction system Thursday trading saw the official rate increase to 1:80 against the United States dollar from a previous figure of 1:75.

The foreign currency auction system has been divided into two segments, the main segment bringing together formal corporate companies and the Small to Medium Enterprises (SMEs) segment where small businesses trade.

A trading update released by the central bank at the close of business Thursday confirmed that the Main Auction segment paid the lowest accepted rate of 1:77.

However, the SMEs segment paid a rate of 1:80, ZWL$3 higher than what the corporate companies were paid.

Both auctions’ highest bidding rates were 1:90 during trading.

The main foreign exchange auction was allotted a total US$17.9 million while the SMEs segment was allotted US$789 866.

RBZ rejected 171 bids which failed to meet set rules as most of the companies had positive foreign currency balances in their accounts and had approached the auction for speculative reasons.

In the SMEs segment, 15 bids were disqualified and out of the total allocated for this sector, US$7.6 million went towards raw materials.

A total US$3 million and US$2.5 million was allotted towards consumables, machinery and equipment for SMEs.

The main auction received US$235 million which went towards raw materials and US$149 million was allocated towards Machinery and Equipment.

A total US$149 000 and US$146 000 was allotted towards consumables and pharmaceuticals respectively. A total of US$18.7 million was allocated for both the SMEs and Main foreign currency auction system.

The foreign exchange auction was established to achieve price stability and exchange rate price discovery.