By Alois Vinga
THE Reserve Bank of Zimbabwe (RBZ) Small to Medium Enterprises foreign exchange auction system Thursday left the exchange rate at 1:75 against the United States dollar, converging with the formal exchange rate.
A trading update released by the central bank at the close of business Thursday showed that a total US$460 167 was allotted on the day with the highest rate reaching 1:85 and the least accepted rate standing at 1:75.
The formal or auction rate drifted from $73 to around $76 to the greenback last Tuesday.
The number of bids received during the auction system stood at 40 out of which 7 bids were disqualified for failing to meet set criteria.
From the totals allocated, US$ 178 517 went towards raw materials while US$91 447 went towards machinery and equipment.
Consumables gobbled $86 309 while retail and services received a total US$63 700.
The black market rate has been stagnant at US$1 to $90-95 for over five weeks now.
“Going forward the SMEs auction will be run concurrently with the main auction on Tuesdays,” said the central bank.
The RBZ introduced a second weekly foreign currency auction system to cater for small to medium-scale enterprises.
The development follows an appeal by Small to Medium Enterprises for the government to include the participation of SMEs in the forex auction trading system.
SMEs raised concerns that the weekly Foreign Exchange Trading System introduced in June was biased towards individuals and large corporates.
They also said they could not raise a minimum of US$50 000 to participate at the auction system.
Only bids for a minimum amount of US$2 500 and a maximum of US$20 000 from each bidder per auction shall be accepted.
Bidders shall submit only one bid per foreign exchange and submission of more than one bid shall result in rejection of all bids submitted by the concerned bidder.
The SME bidders are required to submit their bids to their authorised dealers by 15:00hrs on a day before the auction system.