Expert hails RBZ Auction rate for closing the parallel market gap
ECONOMIC expert, Doctor Prosper Chitambara has hailed the Reserve Bank of Zimbabwe (RBZ) official exchange rate for further moving towards closing the parallel market exchange rate saying the developments will further enhance confidence in the local currency.
Speaking to The Humanitarian Post soon after the release of this week’s Foreign Exchange Auction results, Chitambara said the movement of the official rate to US$1: $138,19 up from US$1: $134,08 recorded last week is a step in the right direction.
“It is positive especially at a time when the parallel market rates have been relatively stable. This will swiftly close the wide gap between the two premiums and undo the wide gap challenge which often undermines confidence in the local currency,” he said.
The top economist said such a development, coupled with the aggressive move by the central bank to clear outstanding backlogs emanating from past allotments made in the previous auctions will further moderate the local currency depreciation.
“You will recall that to date, the RBZ has cleared over US$200 million in backlogs from owed allotments which will further enhance confidence in the local currency,” said Chitambara.
Meanwhile, a trading update released at the close of business Tuesday shows that a total of US$36,8 million was allotted on the two platforms with priority tilted towards supporting industrial productivity needs.
In the main auction, a total 413 bids were accepted with a total value of US$30,1 million.
Out of the total, raw materials needs were allotted US$12,2 million, machinery and equipment US$7,3 million, consumables US$2,2 million, services US$2,3 million, retail and distribution US$3,5 million, pharmaceuticals and chemicals US$1,4 million.
The trend was sustained on the Small to Medium Enterprises Auction platform where a total 1 102 bids were received.
Raw materials needs were allotted US$1,5 million, machinery and equipment US$2,3 million, consumables US$1 million, services US$554 119, retail and distribution US$724 837, electricity US$44 593, pharmaceuticals and chemicals US$278 587, paper and packaging US$140 942.