Harare – The Reserve Bank of Zimbabwe has announced its plans to avail funds for Bureau de Change operators through the auction system, ENN reports.
The arrangement is expected to enhance the accessibility of foreign currency by the small-scale enterprise and individuals through formal channels and also to improve the accessibility of forex for small businesses.
“The bureau de change operators must comply with the agreed terms of engagement which include supporting small transactions up to a maximum value of US $500 per transaction”, said the RBZ governor John Mangudya in a statement.
He also added that all transactions that will be processed by registered bureau de change operators will be strictly monitored through the bureau de change transaction reporting system put in place by the apex bank.
“I think this is a positive move that will help stabilise the exchange rate and it will also help reduce the gap between the official rate and that of parallel market because of the increased availability of the forex .” said an economist Prosper Chitambara. At present, the green back is trading at US$1 to ZWL$86.59 on the official forex auction trading system. However, the black-market rate stands at US$1 to ZWL$130, giving black market traders a premium of 50.1% over the formal rate. Zimbabwe remains a retail market for South Africa, and again, Zimbabwe’s informal sector has eclipsed the formal sector on both revenue generation and employment creation.
Mangudya turned to the foreign currency auction system in June 2020 after seeing exchange rates rampage on the dominant parallel market where companies were accessing foreign currency to fund raw material imports, machine equipment repairs and retooling. It remains to be seen how the latest foreign currency measures will tame the bullish black market exchange rate in an informal trade dominated economy.