Beneficiaries of the Reserve Bank of Zimbabwe (RBZ)’s foreign currency exchange auction have bemoaned the delays by the central bank in disbursing allocated funds.
This comes barely weeks after RBZ governor, Dr John Panonetsa Mangudya announced that the forex backlog of about US$200 million had been cleared.
Confederation of Zimbabwe Industries (CZI) president, Kurai Matsheza Wednesday lamented over the protruding backlog which he said had exacerbated an already dire industrial machinery crisis.
The foreign currency auction system ran into problems about a year into existence last year, amid reports that the central bank was struggling to honour allocated funds.
However, the Reserve Bank of Zimbabwe (RBZ) said in the 2022 Monetary Policy Statement it would ensure settlement of auction bid allotments within a period of two weeks.
Speaking to NewsDay Zimbabwe, Matsheza said:
Our members are currently sitting on some huge backlogs in terms of monies allocated at the auction.
Businesses have got to survive and can’t wait for long to really bring in whatever, be it equipment or raw materials. Obviously the reserve bank has got to allocate what is available so that these backlogs do not grow.
Matsheza added that the availability of foreign currency on the auction will have an influence on the market rate.
The Zimbabwe dollar, is traded at about 250 per every United States dollar while the RBZ pegged it at US$1:$134
Matsheza says the status quo will inevitably continue as long as forex supply on the auction remains depressed.
As a result of the auction backlog, companies are turning to the parallel forex market to source foreign currency as seen by the increase in companies raising prices of goods and services in response to the parallel rate.
Matsheza’s remarks echo findings of a recent market review by the Zimbabwe Coalition on Debt and Development (ZIMCODD).
The study observed that the continued decline of the Zimbabwe dollar on the black market entails high inflation “via the exchange rate pass-through effect.”
Zimcodd said this was one of the major drivers of inflation in Zimbabwe since 2019.
The auction was launched to stabilised the economy by curbing the runaway rate. However, Finance minister, Professor Mthuli Ncube recently said they were yet to establish a rate.
More: NewsDay Zimbabwe