Government introduces Reuters system for forex trading

By Bruce Chahwanda
GOVERNMENT has introduced a Reuters system for foreign currency trading which allows banks to trade freely as a way of stabilising the exchange rate as well as bringing down inflation to sustainable levels.
This was announced by the Minister of Finance and Economic Development, Professor Mthuli Ncube during a news briefing in Harare for the introduction of the currency stabilisation task force.
“I’m addressing you today against a background of recent exchange rate volatility, which has translated into unsustainable levels of inflation. In this regard, the government is taking measures to stabilise the exchange rate and to bring down inflation to sustainable levels in order to achieve macroeconomic stability. In order to stabilise the exchange rate and hence, lower inflation, the government has decided to implement a holistic package of key policy measures. In this regard, a currency stabilisation task force has been set up,” he said.
The floating exchange rate system will be introduced with the participation of financial institutions and bureaux de change.
“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 banks and permit a true market exchange rate to be determined. The bureau de change will also participate on this platform through their authorised dealers. The trading rules of the bureau de change are being liberalised so that they can conduct a wider range of transactions,” he said.
In the floating system, the Reserve Bank of Zimbabwe will remain a significant player in the market through the provision of liquidity to stabilise the exchange rate while also tightening its screws on mobile money platforms.
“The RBZ is, therefore, currently reviewing all regulations covering such platforms. In particular, it is intended to: place limits on daily bulk payer transactions and ensure compliance with the 2% IMTT on bulk payers. Additionally, the daily returns being submitted by the mobile platforms for the financial intelligence Unit of the RBZ will be scrutinised very carefully by the currency stabilisation Taskforce to ensure that all transactions are legitimate and are in accordance with the financial regulations in place,” said Professor Ncube.
The currency stabilisation task force will be spearheaded by the Ministry of Finance and Economic Development and the Reserve Bank of Zimbabwe and will include members of the Monetary Policy Committee and the Presidential advisory council.