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RBZ resolves auction payment glitches

by Staff reporter
24 Feb 2021 at 05:44hrs | Views
The Reserve Bank of Zimbabwe (RBZ) says it has resolved the delayed settlement of foreign currency auction payments that occurred at the end of last year, as the authorities continue to refine the system. The auction has brought about pricing stability in the markets.

"Working closely with banks, the bank has managed to resolve the glitches and payment backlogs experienced last year by some banks' customers in the settlement of funds from the auction," said central bank governor Dr John Mangudya in the Monetary Policy Statement.

"The bank has agreed with banks to ensure that foreign currency allotments are settled within 14 days from the date of auction. This clearing period will enable the Bank and banks to fund the allotments and for banks to undertake the requisite background checks on their customers, where necessary."

The official exchange rate continues to hold steady, as the auction has removed speculative trading on the Zimbabwe dollar.

Following yesterday's auction, the Zimbabwe dollar will this week trade 0,1 percent lower against the United States dollar at $83,88 from $83,75. Similarly to the past couple of weeks, there were no disparities between bids accepted and bids allotted. All accepted bids were fully allotted, with the big companies being allotted the bulk of the foreign currency at US$34,61 million, while SMEs took up US$2,57 million.

Yesterday's total allotments amounted to US$37,1 million. The total number of bids on the auction platform were lower this week at 484 from a record high of 603 from last week, perhaps indicating the removal of shelf companies that were said to be siphoning foreign currency on the auction system and diverting it to the parallel market.

Last week, Dr Mangudya said the central bank's Financial Intelligence Unit (FIU) was investigating the matter. Four hundred and twenty seven bids were allotted. This week the highest bid on the SMEs platform was $88, while that on the main auction was lower at $87. The lowest rate allotted on both platforms was $82.

Foreign currency disbursements to industries saw raw materials accounting for the bulk of allotments at US$16,14 million on the main auction and US$613 448 on the SMEs section. Machinery and equipment came in second with US$6,23 million on the main auction and US$485 101 on the SMEs section.

Consumables came in third on the main auction at US$2,15 million; but on the SMEs section, consumables took up US$714 924. The foreign currency auction system has brought about pricing stability, and both the fiscal and monetary authorities have maintained a tight leash on money supply growth. According to latest central bank data (as at February 12), the country's reserve money declined by $472,89 million, to $18,9 billion, largely reflecting a decrease of $554,73 million in banks' liquidity at the RBZ, as authorities maintain contractionary fiscal and monetary policies.

Source - the herald

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