The government has introduced a Foreign Exchange Auction Trading system. Read the RBZ statement about the action below:
Further to the Press Statement of 8 June 2020 by which the Monetary Policy Committee advised that a formal market-based foreign exchange trading system will be put in place, the Bank wishes to advise the public that the Foreign Exchange. Auction Trading System will be operational with effect from 23 June 2020.
The adoption of a Foreign Currency Auction System is expected to bring transparency and efficiency in the trading of foreign currency in the economy. The salient features of this Auction System will be as follows:
1. Bidding Conditions and Qualifying Criteria
Bidding on the Foreign Exchange Auction Market will be on the following terms and conditions:
i. Bidders will submit their bids as individuals, rms and public enterprises through their Authorised Dealers(banks);
ii. Bidders will only submit one bid per auction. In cases where the bidder submits two or more bids, all the bids shall be rejected;
iii. Allotment of foreign currency to winning bids will be based on the Import Priority List;
iv. The auction will only accept bidsfor a minimum amount of US$50,000 and a maximum of US$500,000 from each bidder per auction;
v. The bidding platform shall be the Reuters Foreign Currency Auction System, which shall be linked to the Computerised Export Payments Exchange Control System (CEPECS) and Computerised Exchange Control Batch Application System (CEBAS);
vi. All bids will be in United States dollars (US$);
vii. Successful bids shall be allotted in full but if funds are not enough, allotments shall be on a pro-rata basis;
viii. Foreign currency will be allotted on auction is fully allotted; and
ix. A weighted average rate will be calculated based on allotments, and the average rate will be used as the market exchange rate until a new weighted average rate is determined at a subsequent auction.
Authorised Dealers will be required to serve all importers and users of foreign currency in between the auction days at the ruling market rate. The crawling exchange rate, which will be adjusted in line with economic fundamentals from time to time, shall only be used for Government and debt service (including blocked funds) transactions.
2. Information to be included in bids
2.1. Importers will bid for foreign currency on an approved Bid Form through their Authorised Dealers and provide the
i. Name of Authorised Dealer;
ii. Name of Applicant;
iii. Type of transaction and sector category;
iv. Bid Amount in US$;
v. Bid rate;
vi. The Zimbabwe Dollar (ZW$) equivalent;
vii. FCA balance declaration; and
viii. Relevant import invoice (s).
3. Information to be submitted by Authorized Dealers on the bidding platform
3.1. Authorised Dealers shall submit to the following information when making bids on behalf of their clients:
3.1.1. Name of Authorised Dealer;
3.1.2. Name of applicant;
3.1.3. Bid amount in US$;
3.1.4. Bid Rate;
3.1.5. Purpose; and
3.1.6. Sector category.
4. Bidding Timelines
4.1. The Auction will be conducted once every week on Tuesdays.
4.2. Where the Auction date falls on a public holiday, the Auction will be conducted on the next business day which is not a public holiday.
4.3. Cut-off time for submission of bids will be 0900 hours on the day of the Auction.
4.4. Auction results will be released and published by 1630 hours on the Auction day.
5.1. Payment for winning bids will be made through the Zimbabwe Electronic Transfer and Settlement System (ZETSS) on a T+1 basis.
5.2. The Bank will transfer the foreign currency to the Nostro account of the winning bidders Authorised Dealer, after receiving the ZW$ equivalent. In line with international best practice, settlement of funds transferred to the Nostro account will be on a T + 2 basis.
6. Market Discipline
6.1. Any entity found participating on the Auction for the sake of currency manipulation shall be disqualified from participating on the Auction System.
6.2. Entities with positive balances in their Nostro accounts will be disqualied from participating on the Auction System unless they provide justication.
6.3. The Exchange Control agging system will be used to identify delinquent participants and as a result:
Bids by Red Flagged entities with overdue Forms CD1 shall be disqualified at Authorised Dealer level. Entities must comply with regulations applicable to the repatriation of export proceeds to the country ;
Entities with overdue and unacquitted Bills of Entry.
Trending On Zimetro. . .
Prophet Passion Java buys wife a 340K Lamborghini Urus 2020 custom made as a birthday gift: Video
So yesterday was Prophet Passion Java’s wife’s birthday. Lily Java turned 30 yesterday and we put an article about that. Below is a little catch-up…
The beautiful and humble soul has turned 30 years today and we are so happy to celebrate with her. She is also happy about her unborn baby which they are…full details
Also Read: THINGS YOU MIGHT NOT KNOW ABOUT GINIMBI
Genius Kadungure aka Ginimbi was a popular Zimbabwean socialite and businessman.
He was also the founder and Chief Executive Officer of a gas company, Pioneer Gases which has interests in Botswana, South Africa, and Zimbabwe. He was also the owner of Dreams Nightlife Club...read more