eBusiness Weekly
Tapiwanashe Mangwiro
The Reserve Bank of Zimbabwe allotted US$16.1 million in December 2023 as it continued to support the economy through the foreign currency auction market.
“The sum of US$3 909 195 was allotted to 228 beneficiaries under the Retail Foreign Exchange Auction during the month of December 2023 and the sum of US$12 830 473 was allotted to 263 beneficiaries under the Wholesale Foreign Exchange Auction during the month of December 2023,” the apex bank noted in a statement.
Total foreign exchange payments for December 2023 were US$685 413 107 with foreign currency accounts using US$651 028 674, foreign Exchange Auction Allotments reaching US$16 739 668 and the interbank market paying US$17 644 765.
“The bulk of the retail auction allotments during the month of December 2023 (58 percent) was for payment for raw materials amounting to US$1 489 281 and machinery and equipment to the tune of US$763 311.
“The remaining 42 percent of the total allotments went towards payment for services of US$474 514, consumables of US$556 276, retail and distribution amounting to US$129 617, pharmaceuticals and chemicals amounting US$399 609, and manufactured goods valued at US$96 587.”
However, the local dollar has been on a decline as it kicked off the new year with a significant depreciation, dropping over 40 percent on the black market due to a persistent high demand for foreign-exchange that exceeds supply.
Prominent economist, Prosper Chitambara, attributed the volatility in the foreign currency exchange market to a growth in money supply following the payment of bonuses to public and private sector workers.
“I think the payment of bonuses by the government and the private sector has increased the money supply in the economy, which caused the increase in the demand of the US dollar thus resulting in the depreciation of the local currency,” Chitambara said.
“But, I think it is really about the payments and the increase in the liquidity of the local currency that has triggered the parallel rate.
“When one gets paid in Zim dollars you convert that money into US dollars.”
