Zimbabwe's central bank just clarified who decides the official exchange rate. The RBZ stepped in because travel industry groups misunderstood what "market-determined" meant in their policy statement. These business groups thought they could create their own rates for currency exchange, which led some sellers to ignore the official rates completely.
Dr. John Mushayavanhu from the Reserve Bank explained how things really work. He said Zimbabwe uses a floating system where banks set the rate through actual buying and selling transactions. The official "market-determined rate" comes only from this interbank trading system. This rate should be what businesses use when they price everything they sell.
The central bank boss stressed an important point—no company outside the banking system has permission to make up exchange rates. He also explained that an earlier rule about a 5% trading margin only happened when they first launched the ZWG currency. Banks can buy foreign money from sellers or the central bank and then resell it with markups that match those in other countries.
The clarification helps fix the confusion that recently spread through Zimbabwe's tourism sector. Many business owners had wrongly believed they could decide their own currency values based on what they thought the market wanted. The RBZ statement firmly places that power only with the interbank market, where authorized dealers conduct their daily transactions.
Dr. John Mushayavanhu from the Reserve Bank explained how things really work. He said Zimbabwe uses a floating system where banks set the rate through actual buying and selling transactions. The official "market-determined rate" comes only from this interbank trading system. This rate should be what businesses use when they price everything they sell.
The central bank boss stressed an important point—no company outside the banking system has permission to make up exchange rates. He also explained that an earlier rule about a 5% trading margin only happened when they first launched the ZWG currency. Banks can buy foreign money from sellers or the central bank and then resell it with markups that match those in other countries.
The clarification helps fix the confusion that recently spread through Zimbabwe's tourism sector. Many business owners had wrongly believed they could decide their own currency values based on what they thought the market wanted. The RBZ statement firmly places that power only with the interbank market, where authorized dealers conduct their daily transactions.
