By Alois Vinga
RESERVE Bank of Zimbabwe (RBZ ) Monetary Policy Committee (MPC) has put in place a raft of measures aimed at strengthening the auction system at a time when weekly allotments reached US$46,5 million.
In an update , RBZ governor, John Mangudya said MPC resolved to sustain the current downward inflation trajectory and exchange rate stability, while supporting the foreign exchange auction system and the robust economic growth for 2021 and beyond.
“The bank policy rate was maintained at 40% per annum and the interest rate on the Medium Term Bank Accommodation Facility at 30% per annum. Reserve money thresholds were maintained at a target of 20 %, with the desire and view to achieve a lower level of monetary expansion by year end,” he said.
The MPC maintained the US$500 000 and US$20 000 maximum bid limits for primary producers under the main auction and SMEs auction, respectively and capped bid limits for secondary users, consumables and services at US$100 000 under the main auction.
Among other measures, the MPC encouraged the business community and banks to ensure that they exercise customer due diligence on all foreign exchange transactions in compliance with international best practices.
“Further liberalising the operations of bureaux de change to promote financial inclusion by allowing them to process small value foreign currency transactions of up to US$50 per person per week on the basis of individual identities, with charges and commissions levied by the bureaux de change not exceeding 10% per transaction,” Mangudya said.
The developments come at a time when the RBZ received 1 376 with 444 on the main foreign auction and 932 on the SME auction.
Raw material needs were allotted US$13 million while machinery and equipment received US$8, 5 million on the main auction.
The same needs were allotted US$3, 1 million and US$ 3, 9 million on the SMEs auction platform.
A grand total of US$46, 5 million was allotted with the SME platform receiving US$12, 3 million and US$34, 1 million on the Main Auction platform.