Zimbabwe’s Central Bank governor Mr Gedion Gono has announced new foreign exchange rules in an attempt to eliminate speculation and help stop the black market. The Reserve Bank of Zimbabwe has with immediate effect introduced a willing buyer, willing seller policy and the country is moving away from the current fixed exchange rate policy.
Just when after I wrote an article asking where Mr Gedion Gono was, when all this madness was taking place in the Zimbabwean economy (you can read previous post here). He has announced a number of measures in his Monetary Policy statement. But this is nothing new as he always announce these Monetary Policy statements. Will he succeed this time around? Not under this current political climate in Zimbabwe.
Under this scheme, Authorised Dealers will match sellers and buyers of foreign currency using a predetermined priority list as set from time to time by the Reserve Bank of Zimbabwe in consultation with different stakeholders in the different sectors of the economy.
The official exchange rate is currently pegged at ZW$30 000.00 to US$1, even though on the parallel market is trading at about ZW$190 million to US$1. The Zimbabwe dollar is also currently trading at ZW$370 million to one British pound.
The Zimbabwean economy has been on free fall for some years now. Inflation is estimated at 165 000 percent. 80 percent of the population is unemployed, and the unemployed few can barely afford to feed their families for just one week on their monthly salaries.
The country is faced with a total collapse of public services, their is a severe shortage of basic commodities, fuel, foreign currency. This is a country which was once the bread basket of Africa but now can barely feed it’s citizens.
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Wed, Apr 30, 2008
Money Matters