Business Reporter
THE Reserve Bank of Zimbabwe (RBZ) weekly allotments this week hit US$19,6 million on the back of strong demand for foreign currency.An update released at the close of trading Tuesday shows that the Main and SMEs Auction platforms received US$17,8 million and US$1,8 million respectively
On the Main Auction platform , 242 bids tilted in favor of spurring productivity were accepted amounting to US$17,8 million out of which raw materials received US$9,4 million, machinery and equipment US$2,2 million, consumables US$1,26 million, Retail and distribution US$1,8 million, pharmaceuticals and chemicals US$638 772,41 , paper and packaging US$560 438.
A similar trend was sustained on the SME Auction where the highest amounts of money were allotted towards raw materials to the tune of US$461 549, machinery and equipment US$573 835.
“Bids with outstanding Bills of Entry, sufficient ZWL and those with positive FCA balances were disqualified. Some bids were allotted on a pro-rata basis,” added RBZ.
Analysing the trends, economist Persistence Gwanyanya said so far there is no need to panic since all developments are consistent with market trends.
“High demand for foreign currency continues to see ZWL depreciation towards equilibrium with the parallel market rates. The Zim$ depreciation is necessary to ration out demand for foreign currency which is still high and as such there is need for more tightening of ZWL liquidity conditions,” he said.
He said such developments would see the official rate going at part with the parallel market rate as well as containment of foreign currency demand on the auction system which would result in the right sizing of the economy.
“The opening of tobacco marketing season on 8 March is expected to improve US$ liquidity in the market, supporting the Auction system functionality,” said Gwanyanya
