Reserve Bank of Zimbabwe (RBZ) Governor John Mushayavanhu said that economic agents are free to set prices that are not tied to the official exchange rate.

Mushayavanhu made these comments during a meeting with the Tourism Business Council of Zimbabwe (TBCZ) last week, where he defended the key monetary policy measures introduced by the bank. He said:

The market is free to price their goods and services at whatever USD to ZiG rate they prefer without being limited to using the official RBZ exchange rate.

This move effectively liberalises the pricing system, allowing companies to adopt exchange rates that reflect market conditions.

Mushayavanhu clarified that the Financial Intelligence Unit (FIU) would not penalise businesses for using pricing models not tied to the official exchange rate, as long as the pricing remains within reasonable margins.

He further warned that economic agents who attempt to exploit the market with inflated exchange rates would soon find themselves unable to compete.

RBZ Deputy Governor Innocent Matshe added that the realistic exchange rate, based on economic fundamentals, should be US$1 to ZiG22, a level the market is expected to reach.

Mushayavanhu also revealed that some fuel traders had approached the RBZ to offer to sell fuel in ZiG to meet their local obligations.

He said that, over time, fuel dealers would voluntarily switch to selling the commodity in the domestic currency, adding: “We do not want to return to long queues and fuel shortages”.

More: The Herald