Story by Owen Mandovha
THE Reserve Bank of Zimbabwe’s (RBZ) willing buyer willing seller exchange rate system is bearing fruit, with the central bank leaving the market to determine the exchange rate.
In a statement released this Wednesday, the Reserve Bank of Zimbabwe (RBZ) clarified that it has no control over the referral exchange rate being used by economic agents, saying the rate is derived from the interbank market through the willing buyer willing seller system announced in the 2024 Monetary Policy Statement.
Analysts have weighed on the subject given that over the past six months, the exchange rate has remained relatively stable, and premiums have been gradually declining, pointing towards convergence between the interbank and parallel foreign exchange rates.
“The interbank market has been used to determine the exchange rate by the central bank and what it means is that holders of foreign currency can set the price of foreign currency they have to the buyer using banks. There is no fixed exchange rate that is being done by the RBZ. It is essentially the market forces of supply and demand that is determining this rate,” economist, Mr Malone Gwadu said.
Economic commentator Mr Persistence Gwanyanya further explains how banks should be guided by international best practices.
“Once banks come up with an average weighted rate they will have to put a margin following international best practices which means that these margins should not be ridiculous but are within the acceptable bands,” Economic commentator, Mr Persistence Gwanyanya said.
For the past six months, the local ZiG currency has been stable against the United States dollar and the new foreign currency trading framework has been refined using the willing buyer willing seller system which allows market forces to be the only factor in coming up with an exchange rate.
