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Business Writer
The Bankers Association of Zimbabwe (BAZ) says the auction system, which will trade for the fifth time today, “brings transparency and efficiency in the trading of foreign currency in the economy”.
The auction system became the official platform for foreign currency trading in the country from the 23rd of June 2019, and has seen more than US$56 million changing hands to date.
Since inception of the auction trading system, the Zimbabwe dollar exchange rate has depreciated from a peg of 25 to the green back to 68,8 at last week’s auction.
While there was a big drop in the exchange rate on the first day by 129 percent, the following three auctions saw the rate of depreciation slowing to 11 percent, 3 percent and 4 percent in the last three auctions respectively.
The premium between the parallel market rate and the official exchange rate has also narrowed from 115-25 to 90-68.8.
“The introduction of a Foreign Exchange Auction System has been a key recommendation item in BAZ’s regular inputs to the Monetary and Fiscal Authorities,” said BAZ President Ralph Watungwa in a statement released last week.
BAZ said it made representations on the need for an auction system for foreign currency trading during crafting of the both the Monetary Policies and National Budgets for the years 2018, 2019 and 2020.
BAZ called on exporters and sellers to submit their forex indicating the amount offered and the expected exchange rate through their respective banks.
“We further call on authorities to continue providing this platform for price discovery and for all players, particularly foreign currency generators, to support the auction platform,” reads part of the statement.
Online Reporter