The Reserve Bank of Zimbabwe (RBZ) said foreign currency reforms, which started with the separation of accounts in October 2018 and the re-introduction of the local currency in June 2019, have now been fully achieved.
The apex bank also said that the foreign currency market is stabilising following the currency reforms which were set in motion in October 2018.
In its mid-term Monetary Policy Statement, the RBZ said that the introduction of the local currency and the fine-tuning of the interbank market resulted in increased foreign currency trading in the formal system. The statement read in part:
The introduction of the Zimbabwean dollar together with the fine-tuning of the interbank market resulted in increased foreign currency trading in the formal system and narrowing of the premiums between the interbank market and parallel market foreign currency rates.
In October 2018, the central bank ordered banks to create separate Nostro (external bank) foreign currency accounts (FCAs) and real-time gross settlement (RTGS) FCA accounts, as part of measures to preserve value for foreign currency earners and to boost market confidence.
On February 22 2019, the RBZ floated the RTGS with the rate starting at ZWL$2,50/US$ and in June, the local currency abandoned a decade ago at the height of hyperinflation was re-introduced.
However, 8 months later the value of the Zim dollar has plummeted, with the interbank exchange rate now standing at ZWL$15,59/US$.
??please explain…. what have we achieved ?