Economists have commended the Reserve Bank of Zimbabwe (RBZ) for selling foreign currency (forex) to bureau de changes to improve the accessibility of forex for small businesses.
RBZ started selling forex to bureau de change with effect from 21 April 2021.
This arrangement was premised on improving the efficacy of the foreign exchange market in the country and enhance the accessibility of foreign currency by small-scale enterprises and individuals through formal channels.
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Commenting on the development, economist Prosper Chitambara said the move by the central bank should help to stabilise the exchange rate. Chitambara said:
I think this is a positive move that will help stabilise the exchange rate. It will also help reduce the gap between the official rate and that of the parallel market because of the increased availability of the forex.
Chitambara also said the availability of foreign currency on the market will be enhanced by the current tobacco selling season.
The Forex auction system was introduced in June last year after seeing exchange rates rampage on the dominant parallel market where companies were accessing cash for imports of raw materials and retooling.
By the first quarter of last year, the domestic currency had surrendered substantial value against the United States dollar, plummeting to about US$1: ZW$165 on the parallel market, from US$1: ZW$2,50 when it was introduced last June.
But since the return of the foreign currency auction system that had initially failed in 2004, the exchange rate has stabilised at about US$1: ZW$84 although the parallel market rate is around ZW$120.
While some experts are cautious about the sustainability of the current stability, major companies have said the central bank chief has helped significantly improve the availability of the greenback through the auction system.