HomeLocal NewsRBZ vows to tame forex black market

RBZ vows to tame forex black market

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BY WINSTONE ANTONIO
RESERVE Bank of Zimbabwe (RBZ) governor John Mangudya yesterday pledged to continue availing foreign currency through the foreign exchange auction system to ensure uninterrupted supply.

Mangudya made the remarks after meeting captains of industry and commerce to discuss measures to tame the runaway parallel market exchange rates.

“The parties unanimously agreed that whilst macroeconomic fundamentals were sound to support exchange rate stability, immediate measures were necessary to contain the movement of the parallel exchange rates,” he said.

“It was noted that the recent volatility in the parallel exchange rates was due to behavioural factors. In order to address these negative behavioural traits, it was agreed that a holistic and collaborative approach was required.”

Mangudya said the RBZ would continuously monitor monetary and foreign exchange developments to ensure that the exchange rate remains stable.

“Reserve Bank of Zimbabwe undertook to continue tightening money supply under its conservative monetary targeting framework to ensure that money supply would not be a source of exchange rate destabilization,” he said.

“Reserve Bank of Zimbabwe undertook to review bank policy rates to curb speculative borrowing, refine and streamline the foreign exchange auction system to ensure that it continues to play its price discovery role in the foreign exchange market.”

He also promised to deal with the funding backlog of foreign exchange allotments.

He said the Bankers Association of Zimbabwe (BAZ) had committed to ensure that all bids submitted to the foreign exchange auction were authentic, ensuring continued due diligence on all their customers and applications for foreign
exchange.

The retailers requested government to level the playing field in their respective operating environments by attending to the menace of foreign currency traders milling outside and around shops and trading areas, identifying and bringing to book funders of foreign currency traders and  dealing with informal traders operating without licences and sometimes outside legal or policy parameters.

He said the manufacturing sector undertook to ensure responsible pricing and to comply with the three focal areas under the Statutory Instrument 127 of 2020 highlighted above.

“The government and the bank pledged to continue supporting the manufacturing sector by levelling the playing field to ensure that exporters obtain a fair value of their export earnings,” he said.

“All the parties underscored the need to maintain the macroeconomic stability momentum experienced in the last 12 months. The bank, on its part, undertook to continuously monitor monetary and foreign exchange developments to ensure that the exchange rate remained stable.”

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