US$46mln allotted at forex auction platform

Business Reporter

THE Reserve Bank of Zimbabwe (RBZ) on Tuesday allotted US$46,87 million to bidders at the official Foreign Currency Auction System as it continues to facilitate smooth access to forex resources to enhance productive sector operations.

More than 4 000 established businesses and small to medium enterprises are benefitting from the weekly platform, whose successful operations have helped contain exchange rate volatility while assisting the economy towards price discovery.

According to the RBZ auction report, this week Zim-dollar is trading at 99,93 against the United States dollar from 98,9 last week. A total of 631 bids were allotted US$35,79 million on the main auction while 1,238 small businesses were allotted US$11,08 million on the SMEs segment.

Raw material requirements, machinery and equipment, industrial consumables, retail imports, energy and power products, pharmaceuticals, paper and packaging continue to dominate the industry needs.

The RBZ has, however, expressed concern over the abuse of the forex auction platform by some unscrupulous businesses, prompting the authority to tighten regulations. RBZ Governor, Dr John Mangudya, has since announced that all foreign currency bids shall be submitted through the bidders’ respective bankers at least four business days before the auction date.

He noted that of late, there has been a significant increase in the number of bids being submitted through auction system averaging 2000 per week and it is hoped that the change in bid submission timelines would give banks sufficient time to carry out the necessary due diligence.

“The bank wishes to advise the public that, with immediate effect, all bids for foreign exchange shall be submitted through bidders’ respective bankers at least four business days before the date of at the auction,” said Dr Mangudya in a latest statement.

“The bankers shall in turn submit the bids to the bank, the auction administrator at least three business days before the date of the auction.

“There has been a significant increase in the number of bids being submitted through the auction system averaging 2000 per week, and thus the change in bid submission timelines will give banks ample time to carry out the necessary due diligence processes and assess their customers’ bids,” he said.

The RBZ has said that any bid submitted later than the set time frame shall be disqualified. The Government has also dismissed reports that it was considering adopting cryptocurrency as a legal tender saying the Zimbabwe dollar will remain the sole local currency.

 

 

 

 

 

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