Economic analysts who spoke to ZBC News have commended the introduction of the foreign exchange auction system by the Reserve Bank of Zimbabwe (RBZ).
The foreign exchange auction started on Tuesday, with applications worth US$10.35 million being allotted from bids for US$11.4 million, with the weighted average, effectively the official exchange rate until next week’s auction, being $57.3582: US$1.
Kipson Gundani told ZBC News that the foreign exchange auction system will give the economy enough leverage to spearhead various micro and macro-economic activities. He said:
I am glad that finally, authorities realised that the fixed exchange rate regime was doing more harm to the economy hence the adoption of a more flexible and sustainable forex exchange determination system.
We expect that the new system will give the country enough breathing space in terms of having a correct exchange rate.
However, we will see prices of goods and services going up in the short term especially those that were being subsidized like fuel.
Another economic analyst, Prosper Chitambara said the development will hopefully incentivise foreign currency earners to produce with the knowledge that they will get a fair value to their investments. Said Chitambara:
This is a first step in the right direction in dealing with many structural anomalies that the country has been experiencing of late, we just hope foreign currency earners will be incentivised to produce more knowing that they will get fair value to their investments.