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Oliver Kazunga, Senior Business Reporter
THE Reserve Bank of Zimbabwe (RBZ) has released the list of top 100 companies that are benefitting from the weekly Foreign Currency Auction System, whose bids have increased to over 500 valued at around US$40 million.

With more forex allocation going towards procurement of key industrial raw materials and equipment, big corporates are the dominant recipients.

The Apex Bank said in a latest statement that the forex auction platform has registered “significant growth” compared to its inception in June last year, where there were less than 100 bids valued at US$11 million.

At least 12 entities have been banned from trading at the auction due to malpractices, said the monetary authority.

“Since the inception of the Foreign Exchange Auction System, there has been a significant increase in both the number of bids and the value thereof from just under 100 bids valued at US$11 million at the first auction to the current levels of over 500 bids valued at around US$40 million at both the main and Small to Medium Enterprises auctions.

“The top 100 beneficiaries of the Foreign Exchange Auction System over the past eight months, from 23 June 2020 to 28 February 2021, are listed hereunder for public information,” said the monetary authority.

The auction platform was introduced last year to improve the productive sector’s accessibility to foreign currency for the procurement of critical raw materials.

Topping the list of the auction system beneficiaries in the last eight months are Cangrow Trading (Pvt) Ltd, which has received US$12 million, Stanbic Investor Services (Nominees) US$11,2 million, Blue Ribbon Foods Ltd (US$10,49 million), Surface Willmar Pvt Ltd (US$9,17 million), National Foods Limited (US$8,3 million), Varun Beverages Zimbabwe Pvt Ltd (US$7,69 million) and Sable Chemical Industries Limited (US$7,54 million), among others.

“It is also important to note that the same entities have been the major beneficiaries of the interbank foreign exchange market during the same period,” said RBZ.

One of foreign exchange auction rules requires banks to ensure that applicants have enough local currency in their accounts to finance their bids.

However, it has come to the attention of the monetary authority that some banks were not paying particular attention to this requirement and have instead been extending overdraft facilities to finance their customers’ bids.

RBZ said in line with the monetary targeting framework designed to control the growth of money supply, funding of bids through overdrafts and advances was being discouraged. Where absolutely necessary, it said bank lending should be limited to a maximum of 50 percent of a bid. Under such exceptional circumstances, bidders would be required to have in their accounts a minimum balance equivalent to 50 percent to cover their bids.

Banks were further reminded to conduct full Know Your Customer (KYC) checks on their clients, and should not be complicit or connive in malpractices with their customers.

“The bank’s Exchange Control Division and the Financial Intelligence Unit (FIU) are continuously monitoring users of foreign exchange in the economy in order to deal with the malpractices,” said the RBZ.

“This exercise has resulted in 12 entities being banned from participating in the foreign exchange auction while 62 entities are under the FIU watch list.”

The banned entities’ respective bankers have been warned against breach of the foreign exchange auction regulations. — @okazunga