One of the reasons we railed against the socalled official rate was that it was not a truly represantive rate as it was obtained from a market that did not allow everyone to participate. The seven auctions held by the RBZ so far required one to place a minimum bid of $50 000 USD effectively closing the door to a lot of small and medium enterprises making any weighted average obtained even more dubious.

The RBZ has now announced a second auction to be held every Thursday where SMEs can place their bids. Just like the main auctions which are held every Tuesday the Thursday auction comes with pretty stringent requirements that a lot of businesses will still struggle to meet. The minimum bid amount is US$2 500 while the maximum bid is US$20 000. This lowers the bar and allows many more entities to take part provided they meet other requirements but there are still businesses out there who still need foreign currency but will not be able to take part.

With two rates which rate will be the official rate is the question at the top of our minds. You can count on the RBZ to come up with rather bizarre solutions.


The Reserve Bank of Zimbabwe (the Bank) is pleased to advise the public of the introduction of a second foreign exchange auction system to cater for the foreign currency needs of Small and Medium Enterprises (SMEs).

The Bank would like to express its appreciation to Government for contributing foreign exchange towards the success of the foreign exchange auction system in Zimbabwe.

The second auction system shall be implemented on the following terms and conditions: –

Bidding Conditions & Qualifying Criteria
i. SME bidders shall submit their bids as individuals or firms through an
Authorised Dealer;
ii. Only bids for a minimum amount of US$2,500 and a maximum of
US$20,000 from each bidder per auction shall be accepted;
iii. All bids shall be in United States Dollars (US$);
iv. Bidders shall submit only one bid per Foreign Exchange Auction and
submission of more than one bid shall result in rejection of all bids
submitted by the concerned bidder;
v. Bids submitted by bidders that have overdue export receipts or bidders
that have not acquitted foreign payments as required by law shall be
vi. Bids submitted by bidders with positive balances in their Nostro accounts
that are equal to or more than the bid amount shall be rejected;
vii. Bidders must submit their bids to their Authorised Dealers by 1500 hours
on every Wednesday, or if the Wednesday falls on a public holiday, on
the next business day, preceding the date of the next Foreign Exchange
viii. Bidders must provide in their bids sufficient details of the purpose of
funds and description of goods or services to be paid for;
ix. Foreign currency shall only be allotted for the purpose for which a bid
has been made and utilising allotted foreign currency for any other
purpose shall not be permitted;
x. Foreign currency shall be allotted on the basis of bidder’s bid rate; and
xi. Foreign currency shall be allotted to winning bids according to the
Import Priority List (80% Priority Level 1 and 20% Priority Level 2).

Information to be included in Bids
2.1. Bidders shall be required to submit to their Authorised Dealer the following
information when making bids on their own behalf to the Foreign Currency
Auction System: –
i. Name of Authorized Dealer;
ii. Name of Applicant;
iii. Applicant’s BP/national identity number;
iv. Type of Transaction and sector category
v. Bid amount in US$;
vi. Bid rate;
vii. The Zimbabwe Dollar (ZW$) Equivalent;
viii. FCA Declaration; and
ix. Relevant Import Invoices.

Information to be Submitted by Authorised Dealers on the Bidding

3.1. Authorised Dealers shall submit to the Bank the following information when
making bids on behalf of their clients.
i. Name of Authorized Dealer;
ii. Name of Applicant;
iii. Applicant’s BP/national identity number;
iv. Bid rate;
v. Bid amount in US$;
vi. Purpose; and
vii. Sector Category.

Bidding Timelines
4.1. The Foreign Exchange Auction will be conducted every Thursday.
4.2. Where the Thursday falls on a holiday, the Foreign Exchange Auction will be
held on the following working day.
4.3. Cut-off time for submission of bids will be 0900 hours on the day of the Foreign
Exchange Auction.
4.4. Foreign Exchange Auction results will be released and published by 1630 hours
on the Foreign Exchange Auction day.

5.1. Payment of winning bids will be made through the Zimbabwe 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.

Market Discipline
6.1. Any entity found to be flouting the rules of the auction should be disqualified
from participating on the Foreign Exchange Auction.
6.2. The Exchange Control flagging 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 the Authorized 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, shall be disqualified;
• Third party bidding shall not be permitted.

Publication of Results
Below is the information that will be availed to the public after every Foreign
Exchange Auction: –
i. Amount on Offer (US$);
ii. Total Number of Bids;
iii. Total Amount of Bids Accepted (US$);
iv. Amount Allotted (US$);
v. Rejected Number of Bids; and
vi. Weighted Average Auction Rate ZW$/US$.

8.1. The introduction of the SMEs Foreign Exchange Auction System is primarily meant to enable this sector to access foreign currency for the import of essential services and raw materials for their businesses.
8.2. It had become clear that the SMEs sector had been crowded out of the foreign exchange space by the big players. The Foreign Exchange Auction System shall continuously be fine-tuned in order to ensure that it best serves the interests of the economy.

Reserve Bank of Zimbabwe