Zimbabwe banks back foreign currency auction system

Zimbabwe’s commercial banks have come out in support of the foreign currency exchange system that was introduced last month and have urged exporters and sellers to use the platform.

Zimbabwe introduced the foreign currency auction system on 23 June and the fifth auction will be held tomorrow.

According to the Zimbabwe Bankers Association so far US$56.3 million has been allotted under the system and the exchange rate which started at 57.3 and is now at 68.8879, has been in line with market conditions.

A member of the Monetary Policy Committee, Eddie Cross, at one time said he was not happy with the absence of banks on the market.

In a statement the BAZ said it was fully behind the auction and called on the authorities to continue providing the platform “for price discovery and for all players”.

“The BAZ stands ready to support economic activity by ensuring that its members engage in the efficient allocation of foreign currency funds through official channels,” the association said.

Although the average rate of the Zimbabwe dollar has been falling steadily against the United States dollar since the auction started, the gap with the black market has been narrowing.

Finance Minister Mthuli Ncube said the government will support the forex auction through fiscal restraint.

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