RBZ to clear auction backlog next month

RYAN CHIGOCHE

Zimbabwe’s central bank governor, John Mangudya (pictured), has promised to clear all outstanding foreign currency auction system allotments backlog by the end of next month, Business Times can report.

The Reserve Bank of Zimbabwe (RBZ) has been struggling to effectively release the forex allotted to companies, resulting in a backlog of US$75m.

“We are going to clear the backlogs by the end of March as it is the thrust of the Monetary Policy,’’ RBZ governor John Mangudya told captains of industry at the Confederation of Zimbabwe Industries symposium held in the capital.

He said going forward the RBZ will only allocate what will be available.

The RBZ gets most of its foreign currency through retention policies, where exporters are required to surrender 40% of export earnings to the central bank. The exporters will be paid in Zimbabwe dollars at the prevailing exchange rate. The balance of 60% is retained in US dollars.

The RBZ had hoped that the forex auction system  would deal with the acute shortage of forex in the country.

But, companies are still failing to access adequate forex from the system, forcing them to source it from the black market where premiums are punitive.

In the event that their bids were accepted, it is taking more than three weeks to access the funds.

Zimbabwe National Chamber of Commerce president, Tinashe Manzungu said Mangudya’s promise cannot be celebrated as there will always be a problem if there are bottlenecks in the system.

“As for now we continue to suffer as businesses. We shall continue to have  a lot of downtime because  we don’t have the raw materials.

“We are going to have reduced output. We are not going to meet our targets  and make some profits,” Manzungu said.

He said the RBZ governor must be truthful to industry and should also be transparent and share views on what is available and not available.