The Reserve Bank of Zimbabwe has liberalised the foreign currency exchange rate which will now be determined by the market.
Addressing the media in the capital today, Minister of Finance and Economic Development Mthuli Ncube admitted that the country has had no transparent and effective foreign exchange trading platform for a long time.
He added that an electronic forex trading platform based on the Reuters system is being immediately put in place to curb parallel market exchange rates.
“Zimbabwe has had no transparent and effective foreign exchange trading platform for a long time.
“Consequently, official rates have not been effectively determined, while a thriving parallel market has developed.
” To correct this anomaly, an electronic forex trading platform based on the Reuters system is being immediately put in place. This platform will allow foreign exchange to be traded freely amongst the banks and permit a true market exchange rate to be determined,” he said.
He added that all the foreign exchange requirements will be available through the interbank market which will use a market-determined exchange rate.
“The Bureaux de Change, will also participate on this platform through their Authorised Dealers. The trading rules of the Bureaux de Change are being liberalised so that they can conduct all wider range of transactions.
“The RBZ will continue to be a significant player in the market, providing liquidity to stabilise the exchange rate, where necessary. This mechanism will be immediately operational.
“All the foreign exchange requirements will be available through the interbank market which will use a market determined exchange rate,” he added.
Under the current interbank trading regime, the forex rate for the Us dollar to the RTGS was much lower compared to the parallel market.
The parallel market rate is hovering around $1US:40rtgs while the interbank rate is $US1:17.70.this has meant that many people with free foreign exchange funds have channeled them to the black market where the premiums are higher.