Zimbabwe to introduce legislation to ensure official exchange rate is used for pricing

Zimbabwe is going to introduce legislation which ensures that the country uses one exchange rate for pricing-  the official interbank rate which is determined by the market.

The country introduced a new currency, the Zimbabwe Gold (ZiG), last month pegging it at roughly 13.5 ZiG to the greenback but  some businesses, including schools, are using black market rates that range from 17 to 22 to the United States dollar.

Zimbabwe is currently operating a multiple currency regime which runs until the end of 2030 but from January, the government introduced a liberalised exchange rate that is freely determined by the banking system based on supply and demand.

Finance Minister Mthuli Ncube said as a result he did not see any reason why people should have another exchange rate of their own. The government, he said, was therefore going to introduce legislation to ensure that no exchange rate other than the official exchange rate is used for the pricing of goods and services.

The ZiG started trading on the interbank market on 8 April and was pegged at 13.5617. It firmed to 13.2517 on 24 April but hit a low of 13.6757 on 6 May. It has since firmed to 13.6653 today, meaning that the ZiG has shed ZiG0.10 since it started trading a month ago.

According to Zimpricecheck, the black market buy rate is 14:1 while the sell rate is 1:20.

Below is Mhtuli Ncube’s full statement:

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