Banks' Statement In Support Of The Foreign Exchange Auction Trading System {Full Text}

The Bankers Association of Zimbabwe (BAZ), whose main mandate is to support the banking business of member banks, supports the Foreign Exchange Auction Trading System introduced by the Reserve Bank of Zimbabwe (RBZ) on 17 June 2020 and became operational with effect from 23 June 2020.

The introduction of a Foreign Exchange Auction Trading System has been a key recommendation item in BAZ’s regular inputs to the Monetary and Fiscal Authorities.

In particular, the BAZ made representations on the need for an auction system for foreign currency trading during the crafting of the following policy documents: –

• 2018, 2019 and 2020 Monetary Policies
• 2018, 2019 and 2020 National Budgets

Our view is that the system brings transparency and efficiency in the trading of foreign currency in the economy.

The BAZ notes that so far USD56.3 million has been allotted under this system and the exchange rate which started at 57.3 and is now at 68.8879, signalling a movement in line with market conditions.

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BAZ continues to call on exporters and sellers to submit their forex bids indicating the amount offered and the expected exchange rate through their respective banks.

We further call on authorities to continue providing this platform for price discovery and for all players, particularly foreign currency generators, to support the auction platform.

The BAZ stands ready to support economic activity by ensuring that its members engage in the efficient allocation of foreign currency funds through official channels.