Bankers Association rallies market to utilise forex auction

Harare, (New Ziana) – The Bankers Association of Zimbabwe (BAZ) on Monday rallied the market to make use of the foreign currency auction to ensure efficient use and distribution of the scarce resource in promoting economic activity in the country.

At the insistence of players in the banking sector, the government last month re-introduced the foreign currency auction system, abandoning a fixed exchange rate of the local unit.

Since then, the exchange rate, once pegged at US$1 to ZW$25 has gradually shifted as the local currency depreciated and is currently trading at $68.89.

The weekly auctions, held four times so far, are supervised by the Reserve Bank of Zimbabwe.

“Our view is that the system brings transparency and efficiency in the trading of foreign currency in the economy,” BAZ president, Ralph
Watungwa said.

“The BAZ notes that so far US$56.3 million has been allotted under this system and the exchange rate which started at $57.3 and is now at $68.8879, signalling a movement in line with market conditions.”

He called on exporters and sellers to keep approaching their banks for facilitating of either buying or selling of foreign currency.

“We further call on authorities to continue providing this platform for price discovery and for all players particularly foreign currency generators to support the auction platform.”

Some generators of foreign currency, who include small players as well as individuals who get foreign currency through remittances, are however still using the parallel market which is offering a higher rate.

Introduction of the foreign currency auction system however took a knock on the black market, which saw the rate, which once peaked at over $100, tumble to between $85 and $95.

New Ziana