Harare — Zimbabwe’s central bank on Wednesday ditched pegging its currency at 1:1 with the US dollar to pave the way for the market to determine the local currency’s value. The move effectively devalued the local bond note surrogate currency, as reported by Business Day on Monday. Officially the Reserve Bank of Zimbabwe pegged the US dollar and the quasi-bond currency at par, but the controversial local currency traded at 1:3.5 on the popular black market. Presenting the country’s monetary policy statement on Wednesday Reserve Bank governor John Mangudya said the central bank had been guided by the black market rates in making the latest move. “We have basically formalised what is already happening in the black market, we have ensured that no one goes to buy money from the parallel market. It’s a formal way of trading in foreign currency," he said. “After taking account of the implications and putting in place safeguards to maintain stability in the forex market, the Bank is with im...

BL Premium

This article is reserved for our subscribers.

A subscription helps you enjoy the best of our business content every day along with benefits such as exclusive Financial Times articles, ProfileData financial data, and digital access to the Sunday Times and Times Select.

Already subscribed? Simply sign in below.

Questions or problems? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now