Forex auction system thrives in 2021

Harare (New Ziana) – The Reserve Bank of Zimbabwe (RBZ) says over $1.9 billion was allotted to over seven thousand beneficiaries under the weekly foreign currency auction system between January and December 2021.
The Reserve Bank of Zimbabwe introduced weekly forex auctions in 2020 to improve access to foreign currency.
But, despite its earlier successes-which include price stability and pushing down black market rates, the auction system faced challenges chiefly the late disbursement of allocations.
This has prompted many businesses to turn to the black market for foreign currency which has the net effect of pushing up the parallel market exchange rate.
The central bank has however guaranteed that all auction allotments would be paid within two weeks from the auction date.
In a statement, RBZ governor Dr John Mangudya said under the main auction, US$1 645 427 941 was allotted to 2 037 beneficiaries while US$326 018 895 was allotted to 5 288 beneficiaries under the SMEs auction.
“The bulk of the funds allotted in 2021 (62 percent) went towards payment for raw materials (US$777 250 614),” he said.
Other funds went to machinery and equipment (US$444 979 034), while US$749 217 188, representing 38 percent of the total allotments, went towards payment for consumables, pharmaceuticals and other needs of the economy.
Meanwhile, Mangudya said since inception, the auction system has churned out over $2 billion.
“From the inception of the Foreign Exchange Auction System on 23 June 2020 to the end of December 2021, an amount of US$2 596 380 813 was allotted to the key sectors of the economy with US$2 238 180 267 being allotted through the Main Auction and US$358 200 546 through the SMEs Auction.”
New Ziana