The Reserve Bank of Zimbabwe has been forced to abandon the interbank rate after realising that gold Producers and tobacco farmers had withdrawn their products in protests against what they termed daylight robbery by the government.
Farmers and gold producers were getting paid their local currency component at the interbank exchange rate of 1:25, at a time the rate had rocketed to around 1:100 on the parallel market.
This led to farmers withholding deliveries at tobacco auction floors, while similarly, some gold producers shunned the country’s official buyer of gold, Fidelity Printers.
RBZ Governor, Dr John Mangudya told the weekly Sunday Mail that they have now introduced a Forex auction system which will become operational from Tuesday.
“What we are saying is very clear in that the auction market is going to receive bids starting Tuesday from an array of foreign currency users. After receiving the bids we will end up having an average rate that will be used for all official systems,” said Dr Mangudya.
He added that all shops will be expected to display the official rate arrived at using bids from financial institutions.
“All shops will now be obliged to display the official rate so that they can peg prices in that regard as opposed to pegging prices based on the parallel market.”
Mangudya hopes this latest move will kill parallel forex market and runaway inflation.