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Harare Bureau

FOREIGN currency allotments at Tuesday’s auctions reached a record US$32,95 million, with both the main auction and the SME auction setting new allotment records in their sector, while the Zimbabwe dollar remained stable, easing a marginal 0,12 percent to trade at $81,81 to the US dollar.

Despite the minute weekly easing of the local unit in recent weeks following a couple of months of equally minute strengthening, bids for the Zimbabwe dollar remain in a tight range and the currency is still stronger than the height of $83,39 set at the end of August 25.

RBZ Governor John Mangudya

The Reserve Bank of Zimbabwe (RBZ) has been allocating all valid bids in full in recent months, having adequate funds for sale and with no bidders going low enough to spark a rejection on their price falling below the market bulge in pricing.

Along with the general trend of rising amounts bid for and allocated, there has been a rising number of companies coming into the auction to source their requirements with total bids across both the main and the SMEs platform reaching 470 this week.

On total foreign currency allocations, the main auction accounted for the bulk of allocations at US$30,6 million, and the SMEs segment accounted for US$2,32 million. However, the total number of bidders was slightly down to 289 from 294 last week, and 268 bids from the big corporates were successfully allotted a total of US$30, 6 million. Unsuccessful bidders have paperwork problems rather than anything significant, with the RBZ insisting that paperwork for previous exports and imports is cleared by deadline, that nostro accounts are used before more currency is bid for, and that all goods and services backing the bid are on the priority lists.

The highest bid on the main auction declined to $88,3 from $90, while the lowest accepted bid remained on $80. And on the SMEs auction, the highest bid remained at $86, while the lowest successful bid returned to $80. Total bids on the SMEs board were also lower at 181 from 192 in the previous week high of 152, although just 15 bidders were unsuccessful.

As per trend, the raw materials segment accounted for the bulk of allotments at US$13,38 million on the main auction and US$627 543 on the SMEs section. Machinery and equipment came in second with US$6,15 million on the main and US$488 162 on the SMEs section. And consumables came in third on the main auction at US$2,65 million; but on the SMEs section, consumables took up US$437 479.

Central Bank governor Dr John Mangudya has said more needs to be done to mobilise foreign currency for the auction system.

“We need banks, Government and ourselves to be able to mobilise lines of credit to ensure that we sustain the auction system. We also need to broaden and deepen the mobilisation of foreign exchange receipts through exports, through Diaspora remittances and any other flows, as this is critical to maintaining the prevailing exchange rate stability,” he said recently.

Improved forex availability on the auction platform will foster greater participation on the platform as some players are still directing dealing with their banks, although using the prevailing official rate. The monetary and fiscal authorities are also focused on ensuring that the macro-economic environment remains conducive.