RBZ forex auction allotments to industry reach highest ever at US$32 million

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By Alois Vinga

RESERVE Bank of Zimbabwe Tuesday allotted a total US$31.7 million to industry, becoming the highest amount to be availed since the launch of the auction system in June this year.

The auction last reached its peak of allotments in September this year after allotting US$31.6 million.

A trading update released at the close of the 21st auction Tuesday shows that the RBZ allotted US$29.9 million on the main trading platform and another US$1.8 million on the Small to Medium Enterprises auction platform.

Raw material purchases received US$12.5 million, machinery and equipment US$4.6 million, services US$2.6 million, retail and distribution US$2.1 million, fuel electricity and gas US$1.5 million, pharmaceuticals US$1.5 million with paper and packaging receiving US$627 000 on the main auction platform.

The main platform received 268 bids while 20 bids were disqualified for breaching the platform’s regulations. The highest bid rate reached $86.30 and a low of $80.

The SME segment received US$413 000, Machinery and Equipment US$377 174, Consumables US$556 338, Services US$160 651, retail and distribution US$100 000, fuel US$39 000, pharmaceuticals US$127 000 and paper and packaging getting US$69 268.

The SME platform received 152 bids with 9 being disqualified as the highest bidding rate reached $85 and a low of $80.

The official exchange rate during the day’s trades settled at $81.60 sustaining almost half a year’s stability.

The exchange rate has settled around $81 for over a month at a time the parallel market rates are also averaging between $80 to $90 but with no capacity to push high volume trades.

Market watchers believe that the stable exchange rate since September 2020 has increased market confidence, fostered price stability, spurred domestic production and reduced inflation, creating an environment conducive for sustainable economic growth.

The increased pro-industrial productivity allotments are expected `boost manufacturing sector, increase locally manufactured goods on the shelves and create jobs for locals in the long run.