US$12m allotted to businesses at Auction System

Michael Makuza, Business Reporter

THE Reserve Bank of Zimbabwe (RBZ) has allotted US$13,9 million to businesses at the Foreign Currency Auction System this week with the local currency losing value against the US dollar to trade at US$1: $779. 

The Auction System resumed trading two weeks ago and saw the official rate moving from US$1: $705 to US$1: $732 last week.

When the auction system closed in mid-December for the festive holiday season, the official exchange rate was pegged at US$1: $671,4.

In its latest update yesterday, RBZ said after this week’s auction, a total of US$12,3 million was allotted for the main auction and US$1,5 million for the Small to Medium Enterprises sector, making it a total of US$13, 863 million.

This week’s auction saw the main auction accepting bids worth US$21,082 million while the SMEs platform accepted US$2,846 million.

As has been the tradition, much of the foreign currency was allotted towards the procurement of raw materials, machinery, and equipment.

A total of US$6,885 million went to the procurement of raw materials while US$1,181 million was channeled to procurement of machinery and equipment in the main           auction.

In the SME category, US$502,062 went towards raw materials while US$318,370 was for machinery and equipment procurement.

The auction system continues to provide affordable and easily accessible foreign currency to the productive sector in a bid to reduce production costs and promote industrial growth as this reduces sourcing of forex from the illegal forex market, which manipulates exchange rates.