Zimbabwe has decided to float its local currency on foreign-exchange markets in an attempt to eliminate speculation on the black market, the governor of the central bank said Wednesday.
“The Reserve Bank has with immediate effect introduced a willing buyer-willing seller priority-focused twinning arrangement in the foreign-exchange market,” Governor Gideon Gono said at a press briefing.
The official exchange rate in Zimbabwe has been kept at Z$30Â 000 for US$1 since September 2007 — but on the thriving black market, one US$1 can be exchanged for about $Z100-million.
Gono said that with the new reforms, “the availability of foreign exchange will gradually improve to a point not experienced over the last few years”.
This is the second time in four years the beleaguered Southern African country has opted to liberalise its foreign-exchange trading system.
In January 2004 it introduced a foreign-exchange auction system in which the central bank determined the rate in a bid to narrow extreme differences between the official and parallel rates. — AFP