The apex bank boss Reserve Bank of Zimbabwe (,RBZ) Governor Dr. John Mangudya says depreciation of the Zimbabwe dollar against the greenback, is a result of price discovery by business.
Mangudya said: “That’s the price discovery by the business. It’s an auction and it means people need to come to the auction with their bids. This is what the market is saying.”
“The market has spoken and we, as the central bank, don’t do anything about that rate. The market has spoken and we are a messenger of the bids that have come to the bank through the banks. It’s a market-driven exchange rate,” he said.
The local currency this week fell 5,4% to trade at $105,7 against the United States dollar from last week’s rate of $99,9.
Mangudya pleaded with businesses to have empathy for consumers, and shun rent-seeking behaviour.
“Let’s have a system of respecting each other and also respecting governance issues. Let us not abuse the auction system and not manipulate the exchange rate for selfish gains,” he said.
Mangudya added that the central bank was working on tightening money supply and reducing the backlog on the foreign currency auction system.
He said the government would continue to fund the auction system and manage the informal market, including monitoring people who abuse bank cards.
“We are happy that those measures that we put in place with the business community so far have made the market remain stable. Going forward, our prayer is that stability will continue to persist in Zimbabwe for the benefit of everyone in this country,” he said.