Zimdollar tanks to $308,5 against USD at forex auction

 THE Zimbabwean dollar further weakened against the United States dollar at the weekly forex auction system on Tuesday where it traded at $308,5 to the green back.

Last week the local currency traded at $290,1.

According to the Reserve Bank of Zimbabwe (RBZ) after this week's auction, a total of US$25,6 million was allotted.

At this week's auction, the main auction was allotted US$21,2 million while the Small and Medium Enterprises (SMEs) got US$4,4 million.

As has been the tradition, much of the foreign currency was allotted towards the procurement of raw materials, machinery and equipment.

A total of US$12,2 million went to the procurement of raw materials and US$5,3 million went to the procurement of machinery and equipment by both the main and the SMEs auction.

The main auction received 285 bids, 263 were accepted whilst the SMEs auction received 782 bids, 723 were accepted and 613 was allotted.

The auction system continues to provide affordable and easily accessible foreign currency to the productive sector in a bid to reduce production cost and promote industrial growth as this reduces sourcing of forex from the illegal forex market, where rates are between $400 and $480.

The interbank exchange rate is at $304,4, which shows a narrowing gap between the forex auction rate and interbank rate.

This comes barely a month after the Government introduced drastic measures to curb inflation.

These include the liquidation of the surrender portion of export proceeds to be settled at the willing buyer willing-seller exchange rate, suspension of third-party country payment on foreign payments and fostering discipline in the stock market by prohibiting inter account transfers, among others.