Zimbabwe has introduced a second foreign exchange auction this time to cater for small and medium enterprises.

The auction will accept minimum bids of US$2 500 and maximum bids of US$20 000 and will kick of this Thursday.

Zimbabwe introduced the foreign exchange system to allow market rates to operate on 23 June with minimum bids of US$50 000 and maximum bids of UUS$500 000.

The Zimbabwe dollar kicked off at $57.36 and was down to $80.47 at today’s auction, the seventh auction.

According to a statement by the Reserve Bank of Zimbabwe bidders with positive balances in their nostro accounts that are equal or more than the foreign exchange that they want will be rejected.

Bidders must provide sufficient details of the purpose of the funds and description of goods or services to be paid for.

The current auction has narrowed the gap between the official and parallel market exchange rates.

The second auction is likely result in a further narrowing of the gap and should ultimately see the Zimbabwe dollar slowly firming against the greenback.