Zimbabwe liberalises forex trading

Zimbabwe has liberalised foreign currency trading with effect from today and is making the interbank market the primary source of foreign currency trading instead of the auction which will now cater for small and medium businesses.

The Reserve Bank of Zimbabwe’s Monetary Policy Committee which met yesterday said interbank trading limits will be increased from US$100 000 to US$500 000.

The auction will have a maximum of USD$5 million a week and will cater for clients with a minimum bid of US$1 500 and a maximum of US$50 000.

The liberalisation of the forex market is likely to stabilise the local currency and increase the appetite for the Zimbabwe dollar which will be used to pay taxes and services from the government.

The Zimbabwe dollar has been on a free-fall over the past three months with industry calling on the government to let market forces determine the exchange rate.

The liberalisation is also likely to kill the black market as companies can now freely sell their foreign currency at market rates.

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