US$9m exchanged in 5 days, inter-bank market bubbles after Zim$ return – RBZ

11 Jul, 2019 - 11:07 0 Views
US$9m exchanged in 5 days, inter-bank market bubbles after Zim$ return – RBZ RBZ

eBusiness Weekly

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

 

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