Economist Persistence Gwanyanya says the issuance of Non-Negotiable Certificates of Deposits (NNCDs) will sustain the Reserve Bank of Zimbabwe (RBZ)'s foreign currency auction's impact going forward.
Last month, the RBZ ordered all banks to surrender the excess cash held on behalf of clients in a bid to plug inflows into the parallel market.
Gwanyanya made the remarks following the upsurge of foreign currency allotments to US$46 million this week in which priority ws given to the manufacturing sector.
The main auction received US$37, 2 million while the Small to Medium Enterprises (SMEs) auction platform received US$8, 7 million.
Raw materials, machinery and equipment needs received US$2 million each on the SMEs platform while receiving US$15, 1 and US$9, 1 million on the main auction platform.
"Again we see the effect of NNCD on the strength of the auction system. So far NNCD of deposits in excess of $20billion have been issued by RBZ to mop up excess liquidity that was putting pressure on the auction system," said Gwanyanya.
He credited the platform for extending support to the industry which has been noticeable through the increase in local products availability in the market.
"Despite the directive ordering shops to sell goods and services at the official exchange rate in line with Statutory Instrument 127/2021, the panic generated thereafter which manifested through price hikes have begun to ease off," he said.
Market watchers believe that NNCDs are not a huge gamble for investors as they are a safe place for investors to put their money.