Anita's Natural Hair Care
Products and Services for natural hair. Henna, Indigo, Hair Growth Oil, Antibreakage Treatments, Dandruff Treatments, Deep Moisture Treatments.
OpenBanks Determine Exchange Rates, Not Businesses - RBZ
The Reserve Bank of Zimbabwe (RBZ) has said the exchange rate is determined by banks, based on supply and demand in the foreign exchange market, under the “Willing-Buyer, Willing-Seller” system.
In a statement released on Wednesday, 12 March, RBZ Governor John Mushayavanhu said that only banks participating in the interbank market are authorised to set exchange rates. No other businesses or entities are permitted to establish their own rates.
Mushayavanhu also said banks have the freedom to sell foreign currency they acquire, including from the Reserve Bank, at rates that align with international standards. The statement reads:
The Reserve Bank of Zimbabwe has taken note of the confusion regarding the exchange rate determination for pricing of goods and services following the pronouncement of the Monetary Policy Statement (MPS) on 6 February 2025.
It is important to highlight that the country is operating under a Floating Exchange Rate system where the exchange rate is determined in the interbank market for foreign exchange under the Willing-Buyer Willing-Seller (WBWS) arrangement.
This rate is purely determined through authorised dealers (Banks) based on trades that would have been transacted through them.
For clarity, “market determined rate” simply means a rate determined on the interbank foreign exchange market based on foreign currency supply and demand.
The exchange rate that is determined in the foreign exchange market by banks is the one that should be used to guide the pricing of all other goods and services in the economy. Therefore, no other business entity outside the interbank market should determine the exchange rate.
The February 2025 Monetary Policy Statement again provided clarity that the 5% trading margin communicated in previous Interbank Foreign Exchange Trading Guidelines was only applicable for the determination of the starting exchange rate at the introduction of ZiG.
Beyond that, banks are free to on-sell foreign currency purchased from willing sellers, (including the Reserve Bank), at a margin consistent with international best practices.
Tags
50 Comments
1111111
