RESERVE Bank of Zimbabwe (RBZ) foreign exchange auction this week allotted US$47 million with key economic productive needs receiving the huge chunk amid reports that the economy is this year set to receive record breaking foreign currency remittances.
A trading update released at the close of business Tuesday shows that a grand total of US$46,8 million was allotted on both the SMEs and main auction platforms.
The main auction received US$35, 7 with the highest bidding rate reaching $115 and a low of $97.
Priority was tilted in favour of raw materials needs which earned US$13,4 million, machinery and equipment US$11,2 million, consumables US$2,7 million, services US$2,3 million, retail and distribution US$2,7 million.
On the SME auction, US$11 million was allotted with key economic needs like raw materials earning US$2,6 million, machinery and equipment US$3,9 million, consumables US$1,6 million, services US$1 million.
The official exchange rate remained slightly weakened by 0,95 % from a rate of US$1:98,98 to the current US$1: $99,93 signifying stability after moving from margins of US$1: $85 since last month.
Retailers have since been allowed to peg their selling exchange rates within a latitude of zero to 10 % margin above the stipulated exchange rates depending on their respective competitive advantages.
Speaking to NewZimbabwe.com Business, economist Persistence Gwanyanya said the results indicate that the central bank would have loved to allot a much lesser but gave into the need to support seasonal demands.
“We are at the peak of preparing for the 2021/22 agricultural season amid a growing economy’s needs which naturally increases the need for US$ support for the purchase of farming implements. This makes the rationalisation of foreign currency difficult as there is need to balance the equally important priorities,” he said.
The top economist expressed optimism that the stability of the exchange rate will be further sustained on the back of surging foreign currency receipts which are expected to close the year slightly above US$8 billion to surpass the figures recorded during the US$ era.
“These gains, coupled with allotments from the International Monetary Fund’s Special Drawing Rights will contribute towards sustained stability of the country’s local currency,” he added.