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Reserve Bank moves to protect local currency

Publish date: 08 July 2019
Issue Number: 831
Diary: IBA Legalbrief Africa
Category: Zimbabwe

President Emmerson Mnangagwa has vowed to crack down on retailers who have not lowered their prices. A TimesLIVE report notes that the Reserve Bank of Zimbabwe has ring-fenced foreign currency trade to the point of choking the black market trade. Leading banks such as SA-owned Nedbank, have been buying the US dollar at $1 to Z$8.6 while on the black market it is fetching just Z$6.5. ‘It now makes more sense to sell forex to the banks but we are not just buying from anyone,’ said a banker. The reasoning behind tightening the grip on forex buying was to avoid a situation where people would take forex from the streets and dump it with banks. As previously reported in Legalbrief Today, the government last week outlawed the multi-currency regime and re-introduced the local dollar which was demonetised in 2008. Finance Minister Mthuli Ncube has defended the move, saying ‘what we have at the moment is fiscal discipline of the highest quality and the results speak for themselves’.

Full TimesLIVE report