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USD2,34 Billion Alloted As 70% Goes To Productive Sectors For Capacity Utilization

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The Forex auction system introduced by Reserve Bank of Zimbabwe Governor Dr John Mangudya Alloted USD 2,34 Billion to support the productive sectors of the economy with more than 70 percent of the allocations going towards the critical sectors and has, therefore, significantly contributed to capacity utilization across the board.

The central and apex bank now current on foreign currency auction allotments has cleared the nearly USS$200 million backlog, according to Finance and Economic Development Minister Professor Mthuli Ncube.

Amounts allocated through successive auctions increased significantly for both the main and small-medium enterprises auctions, bringing the total allotments to the figure mentioned earlier of US$2,34 billion at November 2, 2021.

Last week, the Zimbabwean dollar weakened to $105.6896 against the US dollar, although the change was marginal, and after a week of appreciation, it has returned southwards as the parallel market nears $200.00 per dollar. Last week’s exchange rate is from a prior week’s rate of US$1: $105.6684, representing a marginal 0.03 percent change.

The auction system remains the major source of foreign exchange with more than 5,958 entities having accessed forex through the Main Auction and the SMEs Auction.

Weekly allotments for the main auction increased to US$34,49 million, between July and November 2021, from a weekly average of US$21.95 million in 2020. Similarly, the average weekly allotments for the small and medium enterprises auction also increased from US$1.53 million in 2020 to US$9.90 million during the same period in 2021, the Treasury said.

As at November 2, 2021, 42 percent of the total allotments financed raw materials, while 21 percent funded capital goods such as machinery and equipment and 5 percent went into fuel, electricity, and gas. In terms of companies, those in the manufacturing sector accounted for 17 out of the top 20 auction beneficiaries.

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