The Reserve Bank of Zimbabwe (RBZ) governor, Dr John Mangudya says the local currency at the auction system has been stable for a long time now.
In an interview with 263times on what could be the cause of the continued slide of the Zim dollar against the US dollar on the auction, Dr Mangudya said it is normal to have such slides at the auction system.
“The local currency has been stable, trading in a bid range of between 82 and 88 for a long time now.
“Movement within the band reflects the weights within the bid range and it’s quite normal to have those swings.” Dr Mangudya said.
Last week the governor, during the chief executive officer (CEO) roundtable virtual seminar said the auction system is not going anywhere because the platform will be sustained as the preferred mechanism of formally allocating foreign currency to the market.
He said even sceptics must now see that the auction system was not and has never been a fluke and is here for the long haul.
He added that those that are obtaining foreign currency from the auction market now unnecessarily maintain excess orders and come to the auction market every week thinking the auction will one day be gone.
“They are over ordering their raw materials in anticipation that this thing (might not be there tomorrow) because many people think that it (auction market) is a fluke,” Dr Mangudya said at the seminar.
The Zimbabwe dollar has continued to lose value against the US dollar at the auction market. According to this week’s auction update, the Zimbabwean dollar was trading at 84.52 against the US dollar. Last week it was trading at 82.40 against the US dollar and a fortnight ago it was trading at 84.48 against US$1.