The Reserve Bank of Zimbabwe has allotted US$4,1 billion to businesses through its Foreign Exchange Auction System, making it the largest local source of foreign currency since its inception.
The Foreign Exchange Auction system was introduced in June 2020 in an effort to address the negative impacts of the parallel market on economic stability and provide a more formal and reliable way for local businesses to access foreign currency.
This has been a game-changer for businesses, enabling them to maintain operations, expand their operations, and remain competitive in the global market.
In a statement, RBZ Governor Dr John Mangudya said total cumulative foreign exchange auction allotments stood at over US$4 billion, with the bulk of it channelled towards the importation of raw materials and machinery.
“Total cumulative foreign exchange auction allotments since inception of the Foreign Exchange Auction System in June 2020 stand at US$4 120 819 400,” he said.
In December 2023, a total of US$3 909 195 was distributed to 228 companies under the Retail Foreign Exchange Auction , while US$12 830 473 was distributed to 263 companies under the Wholesale Foreign Exchange Auction during the same month.
The total foreign exchange payments for December 2023 were US$685 413 107, distributed across three different channels: US$651 028 674 for foreign currency accounts, US$16 739 668 for Foreign Exchange Auction Allotments, and US$17 644 765 for the interbank market.
“The bulk of the retail auction allotments during the month of December 2023 (58pc) was for payment for raw materials (US$1 489 281) and machinery and equipment (US$763 311), with the remaining 42 percent of the total allotments going towards payment for services (US$474 514), consumables (US$556 276), retail and distribution (US$129 617), pharmaceuticals and chemicals (US$399 609), and manufactured goods (US$96 587).”
The central bank also plans to keep running the auction system as a platform to allocate foreign currency to the productive sectors of the economy.
During the previous period, the Reserve Bank of Zimbabwe (RBZ) allotted US$3,7 billion through the foreign exchange auction system from its introduction in June 2020 to December 2022. – Herald
