Exchange rate eases to 1:83 in second SMEs forex auction trading

0
1075
Photo by Vladimir Solomyani on Unsplash
  • The Zimbabwe dollar traded at 1:8,56 in latest auction trading
  • From the totals allocated, US$7.6 million was allotted towards raw materials on the main auction whilst US$235 721 was allotted towards the same on the SME auction
  • ●       “The Foreign Exchange Auction System shall continuously be fine-tuned in order to ensure that it best serves the interests of the economy,” Dr John Mangudya

Harare – The Zimbabwean dollar eased to 82.56 against the US dollar following Thursday’s separate foreign currency auction trading for both Small and Medium Enterprises (SMEs) and the main auction in their second and eighth staging respectively.

According to the Central Bank, the separate introduction of the SMEs foreign currency auction which saw its maiden trading last week is “primarily meant to enable this sector to access foreign currency for the import of essential services and raw materials for their businesses.”

Foreign exchange results released by the Reserve Bank of Zimbabwe (RBZ) on Thursday showed that a total amount of US$789 866 was allocated on the SMEs forex auction with the highest rate reaching US$1:ZWL$90 and the lowest rate standing at 1:80, while a total of US$18 million was allocated on the main exchange market at the highest rate of 90 and a lower rate of 77.

In the previous week’s maiden auction for SMEs, the Zimbabwe dollar traded at an average rate of 1:75 where the highest accepted rate settled at 1:85 and the least accepted rate was 1:75.

Meanwhile, the local currency traded at 80 to the greenback following last week’s formal auction offering as it moves closer to converging with the parallel market rate which is hovering around 90-100.

The number of bids received during Thursday’s SMEs forex auction system stood at 75 out of which 15 bids were disqualified for failing to meet set criteria, while the main forex market received a total of 171 bids with 15 of those disqualified.

From the totals allocated, US$7.6 million was allotted towards raw materials on the main auction whilst US$235 721 was allotted towards the same on the SME auction.

Consumables gobbled US$2.5 million and US$145 872 respectively while US$2.9 million and US$148 685 went to machinery and equipment.

The introduction of the second weekly foreign currency auction system followed an appeal by SMEs who raised concerns that the formal trading system was biased towards individuals and large corporates.

Commenting on the introduction of the SMEs foreign exchange system, RBZ Governor Dr John Mangudya acknowledged that, “It had become clear that the SMEs sector had been crowded out of the foreign exchange space by the big players.”

“The Foreign Exchange Auction System shall continuously be fine-tuned in order to ensure that it best serves the interests of the economy,” he added.

Equity Axis News

LEAVE A REPLY

Please enter your comment!
Please enter your name here