Record forex allocation in first auction of 2021

Source: Record forex allocation in first auction of 2021 | The Herald

Record forex allocation in first auction of 2021
Mr Persistence Gwanyanya

Tawanda Musarurwa

Business Reporter

After the three-week gap for the annual shutdown of most manufacturers, the first Reserve Bank of Zimbabwe auction for this year saw a record demand and allocation of US$35,843 million, and the average exchange rate moving just 0,3 percent to $82,09 to US$1.

With the bulk of foreign currency from the auction allocated to the productive sectors, indications are that these businesses in farming, mining and manufacturing, all permitted in a level four lockdown, have been little affected by the latest lockdown, tightening in the second wave of Covid-19 infections.

The Zimbabwe dollar opened the new year steady, shifting by a marginal 0,3043 percent to $82,0914 from $81,7866 to the United States dollar after yesterday’s auction.

This well within the range of movements within the range of $83,3994 to $81,3458 since the end of August when the local currency achieved a high level of stability.

Total allocations this week rose to US$35,843 million from US$29,58 million for the December 21 auction.

Of that total, the bigger corporations accounted for the bulk of allocations at US$33,024 million, and the SMEs segment accounted for US$2,81 million. The Reserve Bank has already taken steps to ensure growing flows of foreign currency for the auctions by decreasing the percentage exporters are allowed to retain, although in return, allowing them to keep these retained earnings indefinitely to build reserves.