Zimbabwe: RBZ Allots 70pc of Auction Currency to High Priority Imports

Seventy percent of foreign currency on offer at each Tuesday auction will be allotted to winning bidders paying for imports listed as priority level 1 on the import priority list, with the remaining 30 percent allotted to successful bidders for goods and services set at priority level 2, the Reserve Bank of Zimbabwe has announced.

Bids now have to be submitted through the bidders' banks by 3pm on the business day before the auction, normally a Monday unless the Monday is a public holiday.

In the first three auctions, bidders had until 9am on the auction day to submit.

Restating the rules for the foreign exchange auctions yesterday, with extra details and modest amendments, RBZ Governor Dr Mangudya said the first three auctions had been conducted successfully since June 23.

But to "enhance transparency and efficiency in achieving the primary objective of price discovery" the bank had decided to restate and reset the operating rules.

Bids are being rejected for non-compliance with rules, with the main problems reportedly being multiple bids, bidders who have not cleared the paperwork for their own exports, and bidders who have cash in their nostro accounts and have not explained why they need more.

The nostro balance issue has now been made more precise so bidders with such balances can only bid if their nostro balances are less than what they need.

These restated rules are now as follows.

l Bids remain between a minimum of US$50 000 and a maximum of US$500 000 and must be in US dollars.

l Bidders can submit only one bid for each auction, and if there is more than one then all bids by that bidder will be rejected.

l Bids submitted by bidders who have overdue export receipts or who have not acquitted their foreign payments will be rejected.

l Bids from bidders in with positive nostro balances equal to or greater than the bid amount will be rejected.

l Bids must be submitted through authorised dealers, that is banks, by 3pm on Monday or, if Monday is a public holiday, the business day before the auction.

l Bidders must "provide in their bids sufficient details of the purpose of funds and description of goods or services to be paid for".

l Foreign currency will only be allotted for the purpose laid out in the bid and using it for any other purpose will not be permitted.

l Foreign currency will be allotted to winning bids according to the import priority list (70 percent priority level 1 and 30 percent priority level 2)

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