RBZ Introduces 2nd Foreign Currency Auction System

The Reserve Bank of Zimbabwe (RBZ) has introduced a second foreign currency auction system for small to medium enterprises (SMEs) which will cater for forex needs of SMEs.

The auction which will be conducted every Thursday will accept bids of a minimum amount of US$2 500 and a maximum amount of US$20 000.

This comes when the central bank in June introduced another forex auction which accepts bids for a minimum amount of US$50,000 and a maximum of US$500,000 from each bidder per auction conducted every Tuesday.

RBZ governor John Mangudya suggested the move was in response to the pleas by smaller businesses who do not need and may not afford US$50 000, the minimum bid.

The rules for the second auction system will be the same as those of the Tuesday big-bidder auctions where bids have to be submitted through banks, backed by proof of purpose for the foreign currency, with invoices attached to the bid document.

Bids have to be submitted through banks by 3 pm on Wednesdays.

The auction system is premised at stabilising the local currency that has been shedding value since reintroduction last year. 

Meanwhile, economist and member of the Monetary Policy Committee, Eddie Cross and another economist Percy Gwanyanya believe more resources are needed for the rate to strengthen.

More: ZBC News; The Herald


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