4 000+ firms benefit from forex auction

14 Sep, 2021 - 00:09 0 Views
4 000+ firms benefit from forex auction

The Chronicle

Business Reporter
More than 4 000 companies including southern region businesses are benefiting from the weekly Foreign Exchange Auction Trading System where a total of US$1,968 billion has been allotted since the introduction of the platform in June last year.

In the interest of transparency and accountability, the Reserve Bank of Zimbabwe (RBZ) revealed this at the weekend when it publicised the list of businesses that have benefited from the official auction system.

Giant Bulawayo companies such as the Treger Group and United Refineries are among the beneficiaries while Dendairy, Sable Chemicals and Sino Cement in the Midlands Province are also part of the list.
However, there are widespread concerns that despite the allotments being made, some companies participating at the platform suffer delays in securing the forex.

The RBZ has however made a commitment to clear the backlog of close to US$200 million by end of this month.

“The auction system has so far covered and benefitted almost every facet of the economy, from, inter alia, individuals’ needs for educational fees, SMEs’ requirements for capital and raw materials and primary producers’ capital requirements,” said the Apex Bank.

“The auction has had bigger footprint in the economy as more than 4 000 entities have accessed foreign currency through allotment of US$1,734 billion at the main auction and US$233,8 million at the SMEs auction.”

A total of 1 728 beneficiaries have been allotted the foreign currency through the main auction while a total of 3 588 companies have benefited from the SMEs auction.

The bulk of the allotted funds (60 percent), according to the bank, went towards payment for raw materials (US$794,7million) as well as machinery and equipment (US$382,5 million) while the remaining 40 percent went towards payment for consumables, pharmaceuticals and other critical needs of the economy.

The other beneficiaries are Blue Ribbon Foods, Varun Beverages, Cangrow Trading, Surface Wilmar, Olivine Industries, Innscor Africa, Zesa, Delta Beverages, Capri Appliances, Zuva Petroleum and Satewave Technologies.
RBZ has also released a schedule showing the total foreign exchange payments by source for the period January to August 2021 amounting to US$4,044 billion.

The figure is broken down as follows: foreign currency accounts (US$2,458 billion), interbank market (US$246,449 million) and the foreign exchange auction system (US$1,340 billion).

The weekly Foreign Exchange Auction Trading System was introduced to improve the productive sector’s accessibility to foreign currency for the procurement of raw materials.

Companies participating at the auction system have also been able to procure essential and strategic imports like pharmaceuticals and chemicals, fuel and electricity.

Share This: