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Zimbabwe adopts market-driven exchange rates to boost economic flexibility
In a significant policy shift, Zimbabwe has lifted exchange controls, allowing businesses greater freedom to set prices for their goods and services. This measure, enacted through Statutory Instrument 34 of 2025, repeals the previous regulation that restricted businesses from using exchange rates higher than the official interbank rate of the Reserve Bank of Zimbabwe. The decision aims to harmonize operations between the formal and informal markets, reduce price distortions, and improve competitiveness by allowing market forces to determine exchange rates.
Professor Ashok Chakravarti, a member of the Monetary Policy Committee of the RBZ, emphasized that the stability of the local currency and economy has instilled confidence in the freeing of market prices. Businesses had already been informally applying exchange rates of between 30 and 32 Zimbabwe Gold (ZiG) per US dollar, above the official exchange rate of 27. The government's measure legalizes this prevailing behavior in the market, aiming to close the gap between the formal and informal sectors. Christopher Mugaga, executive director of the Zimbabwe National Chamber of Commerce, celebrated the progress but stressed the need for complementary fiscal policies to support the liberalized exchange rate system.
#ZimbabweGold
#ZiG
In a significant policy shift, Zimbabwe has lifted exchange controls, allowing businesses greater freedom to set prices for their goods and services. This measure, enacted through Statutory Instrument 34 of 2025, repeals the previous regulation that restricted businesses from using exchange rates higher than the official interbank rate of the Reserve Bank of Zimbabwe. The decision aims to harmonize operations between the formal and informal markets, reduce price distortions, and improve competitiveness by allowing market forces to determine exchange rates.
Professor Ashok Chakravarti, a member of the Monetary Policy Committee of the RBZ, emphasized that the stability of the local currency and economy has instilled confidence in the freeing of market prices. Businesses had already been informally applying exchange rates of between 30 and 32 Zimbabwe Gold (ZiG) per US dollar, above the official exchange rate of 27. The government's measure legalizes this prevailing behavior in the market, aiming to close the gap between the formal and informal sectors. Christopher Mugaga, executive director of the Zimbabwe National Chamber of Commerce, celebrated the progress but stressed the need for complementary fiscal policies to support the liberalized exchange rate system.
#ZimbabweGold
#ZiG
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