RBZ introduces SMEs forex auction as Zim dollar slides to $80.46

RBZ introduces SMEs forex auction as Zim dollar slides to $80.46

Harare, (New Ziana) – The Zimbabwe dollar depreciated by 4.8 percent against the greenback at Tuesday’s weekly foreign currency auction to settle at $80.46, as the central bank announced it had set up a second auction platform for small to medium scale enterprises.

This is the eighth straight week the local unit has slid against the US dollar since it was floated in late June.

At the first auction, the Zimbabwe dollar traded at $53.36, losing half of its value, previously fixed at $25.

Last week, the local unit traded at $76.76.

The official rate however still trails the parallel market one which hovers around US$95.

At Tuesday’s auction, the highest rate on offer was $87 and lowest accepted rate was $78.

A total of US$18.531 million was allocated against bids amounting to US$19.77 million.

At least 237 bids were received of which 36 were disqualified.

The Reserve Bank of Zimbabwe (RBZ) said the SMEs auction system would be held every Thursday, with minimum bids set at US$2 500 and maximum at US$20 000.

Smaller companies had registered their displeasure at being left out of the main auction system, where the lowest accepted bid was for US$50 000.

“The introduction of the SMEs foreign exchange auction system is primarily meant to enable this sector to access foreign currency for the import of essential services and raw materials for their businesses,” RBZ Governor, Dr Mangudya said.

“It had become clear that the SMEs sector had been crowded out of the foreign exchange space by big players.”
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