Staff Reporter

Economists have expressed optimism that the launching of the 2024 foreign currency auction system would have a positive economic impact and help stabilize the economy.

In an exclusive interview with this publication, economic analyst Persistence Gwanyanya expressed optimism about the auction system's ability to alleviate pressures on businesses.

"Currently, established businesses have been accommodating the RBZ auction system, using it as a reference point for pricing due to limited alternatives. The imminent launch of the auction system is eagerly awaited by businesses seeking stability," Gwanyanya stated.

Gwanyanya further emphasized the role of the auction system in curbing the influence of the black market on exchange rates.

"A reasonable amount of foreign currency injected through the auction system could eliminate the unnecessary fluctuations created by the black market. This will contribute to a more stable and predictable exchange rate," Gwanyanya explained.

Anticipating a positive impact on the value of the Zimbabwean dollar, Gwanyanya asserted, "If the auction system is executed effectively and with a substantial amount of foreign currency, people can expect the Zimbabwean dollar to appreciate. This, in turn can boost investor confidence and stimulate economic growth."

Moreso, Busisa Moyo, another economist, argued that the auction system holds several advantages that could reshape Zimbabwe's economic trajectory, saying that the auction system is a catalyst for attracting foreign investment.

"A dynamic exchange rate, as facilitated by the auction system, can instil confidence among foreign investors. This, in turn has the potential to bolster economic stability and growth," Moyo noted.

Moyo went further to emphasize the positive impact of the auction system on market efficiency.

"The auction system introduces healthy competition among participants, leading to a fairer and more efficient foreign exchange market. This is a positive step towards creating an environment conducive to economic prosperity," he stated.

The auction system is anticipated to provide a transparent platform for price discovery, enhancing the accuracy of the exchange rate. It is also expected to empower businesses to make informed decisions, contributing to a more stable economic environment.