Zim central bank sees official, black market exchange rates converging

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The country in February ditched its discredited 1:1 official peg to the US dollar, and merged bond notes and electronic dollars into a transitional currency called the RTGS dollar.

HARARE – Zimbabwe’s central bank governor said on Tuesday he expected the official exchange rate of a new currency to converge with that on the black market within three months, a move that could help increase the flow of dollars into the banking sector.

The mismatch has seen companies and individuals holding dollars selling their money on the black market for higher premiums. Bankers and economists accuse the central bank of manipulating the official exchange rate, charges that central bank chief John Mangudya denied. Zimbabwe’s economy has been crippled by a cash crunch that has caused shortages of fuel, food and medicine.

The dollar shortages have seen some businesses charging prices in US dollars while prices in RTGS dollars have soared, pushing up year-on-year inflation to a 10-year high of 66.8% in March.

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