The Reserve Bank of Zimbabwe (RBZ) says it has cleared the foreign currency backlog which has been hampering the smooth operations of the auction for the greater part of its existence since 2020.
The auction was set up as a price discovery mechanism for the local currency as well as availing foreign currency to local companies needed for procurement of raw materials and retooling.
However, due to low foreign reserves, the Central Bank has been struggling to supply adequate foreign currency which created a huge backlog which reached US$ 300 million around July last year.
“The Reserve Bank of Zimbabwe is pleased to advise the public that it has cleared the backlog of foreign exchange allotments under the Foreign Exchange Auction System. This development is a result of improved foreign exchange inflows in the country,” said the RBZ.
The Central Bank has allotted US$ 3.7 billion through the foreign exchange since its introduction in June 2020 with the bulk having been channeled towards importation of raw materials and machinery.
“Going forward, the Bank will abide by the Foreign Exchange Auction Rules and ensure that foreign currency is available to successful bidders within 14 days from the date of auction. This will go a long way in maintaining a stable foreign exchange rate and sustaining financial stability in the economy.”
Critics have however blasted the RBZ for availing foreign currency at a discounted price which has worked to its detriment.
As of this week, the Zimbabwe Dollar stood at 732.0036/US at the auction widening the gap with the premium parallel market rate of 1100 to 50 percent.