By Tafadzwa Muranganwa
The Reserve Bank of Zimbabwe has come up with a litany of measures in its quest to bring price stability in the wake of the prevailing inflationary environment.
Announcing the measures in the monetary policy read by the central bank governor John Mangudya last Wednesday, RBZ acknowledged that the parallel foreign currency exchange rates which are pegged between $3-$4 have led to price distortions hence the bank has now established an inter-bank foreign exchange market.
“After taking account of the implications and putting in place safeguards to maintain stability in the forex market, the bank is, with immediate effect establishing an inter-bank foreign exchange market in Zimbabwe to formalise the trading of RTGS balances and bond notes with US$ and other currencies on a willing-buyer-willing seller basis through banks and bureaux de change,” stated Mangudya.
The central bank has denominated RTGS balances , bond notes and coins in circulation as RTGS dollars to become part of the multi-currency system a move it says will eliminate the existing multi-pricing system.
“The use of RTGS dollars for domestic transactions will eliminate the existence of the multi-pricing system and charging of goods and services in foreign currency within the domestic economy
“In this regard prices should remain at their current levels and to start to decline in sympathy with the stability in the exchange rate given that the current monetary balances have not been changed ,” revealed the RBZ governor .
Under the new monetary policy banks will report activities of the inter-bank foreign currency to RBZ on a daily basis.
Foreign currency allocations to critical products and services shall continue to be prioritised , according to Dr Mangudya.
“Foreign currency requirements for government expenditure and other essential commodities that include, fuel, cooking oil, electricity ,medicines and water chemicals shall continue to be made available through letters of credit facilities and or the Foreign Exchange Allocations committee,” cited the RBZ boss.
The bank has also activated anti-money laundering measures and cyber risk management in its quest to restore sanity in the economy.
Currently, the country is reeling from a economic malaise brought about by the inflation being pushed by black market foreign exchange rates.The initial bank exchange rate has been pegged at $2.50