HARARE – The Reserve Bank of Zimbabwe (RBZ) said on Tuesday over US$9 million was traded for Zimbabwe dollars inside five days last week at commercial banks alone, hailing this as evidence of public confidence and acceptance of the latest currency reforms by the government.
The figure only related to trading by individuals and non-governmental organizations, previously the main drivers of the parallel market which was the dominant source of foreign currency until government took the bold move to re-instate the Zimbabwe dollar as sole local trading currency two weeks to block a re-dollarisation of the economy.
Until now, use of the local currency was limited after the government adopted multi-currencies, mainly the US dollar, as legal tender in domestic trading 10 years ago after inflation wiped out the value of the Zimbabwe dollar.
The local currency is now freely floated against major currencies.
RBZ governor, Dr John Mangudya told business leaders statistics since the latest currency reforms were announced showed that individuals and NGOs were taking the lead in trading US dollars to Zimbabwean dollars on the currency inter-bank market.
“In the course of last week, we saw between US$8 and US$9 million being exchanged from the US dollars to Zim dollars so that people can go and transact,” he said, dismissing suspicions that the central bank was manipulating exchange rates.
“We are quite happy with that progress and we hope and pray that it continues that way.”
Besides banks, the central bank has also licensed bureau de changes to buy and sell forex.
Dr Mangudya said the apex bank had “no appetite” to control the exchange rate. “We are not controlling the exchange rate, we believe in a market-based exchange rate. We also sell and buy from the inter-bank, therefore we have no appetite to control or to influence that rate because we do not have the foreign currency ourselves,” he said, adding allegations of exchange rate manipulation were nothing but wrong perceptions.
The latest currency reforms badly hit the parallel market which once peaked at US$1: ZW$16, but is now down to US$1: ZW$11, while rates on the official market averaged around US$1: ZW$8.6.
Improved forex trading on the inter-bank bank is expected to assist companies that require hard currency to import raw materials. – New Ziana