RBZ Dismisses Foreign Exchange Market Liberalisation Claims

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By Alois Vinga

RESERVE Bank of Zimbabwe governor,John Mangudya has dismissed claims that the foreign exchange market will be liberalised with the “contempt it deserves”.

In a Thursday evening statement, Mangudya said information circulating on social media was false and mischievous.

“The Bank would like to advise the public to disregard, with the contempt it deserves, the false and mischievous article circulating on social media suggesting that the Bank has devalued the local currency,” he said.

The central bank governor said the intention of such disinformation is to cause panic and despondency, and ultimately destabilise the country’s foreign exchange markets through manipulation of the exchange rate.

He, however, maintained that the operations of the market will be run efficiently and in line with the Monetary Policy Committee’s directives.

“We also wish to advise the public that, consistent with the Monetary Policy Committee announcement on 19 November 2019, the Bank is enhancing the Reuters foreign exchange trading system to ensure efficiency and effectiveness in the allocation of foreign exchange to the productive sectors,” he said.

He said, already, engagements have been done with commercial banks to ensure smooth implementation of this system. Currently, banks are working on a user-test environment to enhance the efficiency of this foreign exchange trading system.

However, the public speculation and Mangudya’s remarks come at a time when most members of the public have shunned the interbank market for its lack of flexibility and independence in setting market based rates.

Other players from the business sector have since raised numerous complaints that the market has not been able to avail adequate foreign currency to support productivity.

Currently, the interbank market rates are currently standing at  $17.60 against US$1 while the parallel market rates have reached a high of $27.60 against US$1.