Exchange rate moves to 1:124 at auction platform

THE official exchange rate moved to US$1:$124 this week in favour of the greenback, which is continuing to firm when compared to last week's local currency value of $120,5.

In its latest weekly update, the Reserve Bank of Zimbabwe (RBZ) said a total of US$36,8 million was allotted to the auction system with US$29,6 going to the main auction and US$7,2 being allotted to Small and Medium Enterprises (SMEs).

As usual procurement of raw material chewed the bulk of funds at US$12,2 million this week with US$7,3 going towards and machinery, and other equipment.

The SMEs auction was allotted US$130 438 to raw material and US$3,4 million to the procurement of machinery and equipment.

Consumables, which include spares, tyres and electricals, as well as services such as loans, education and dividends, retail and distribution, electricity, pharmaceuticals and paper and packaging also continue to benefit.

According to the RBZ, the main auction received 538 bids and 485 were accepted while the SMEs auction received 936 bids and 839 were accepted.

The forex auction system continues to play a critical role in providing affordable foreign currency to the productive sector.

This has seen the industry capacity utilisation jumps to about 60 percent in 2021 as compared to 47 percent in 2020 according to Confederation of Zimbabwe Industries (CZI).

More than 1 500 entities have already benefited an amount of US$69,6 million allotted from the auction system since January only while more than 7 000 entities benefited since June 2020 when the auction system started.