Even though the difference between the black market rate and the official rate continue to run away ahead of official rates, Dr Mangudya foresees the two rates to converge in 3 months. Usually, such comments are followed by an explanation of what the Reserve Bank of Zimbabwe will do to achieve that or what is it doing to achieve that, but the Governor didn’t disclose anything. The Governor only said:
I think within three months we will have a convergence of these rates of parallel market and interbank market rate.
At the moment the parallel markets are at 4 or 5 and the bank rate is 3.3, so we are not very far from each other.
As of yesterday, the RTGS traded at 3.3 per dollar on the official market but on the black market, it’s being traded at 5 per dollar. So far RBZ’s gamble of allowing the formal trading of US dollars and RTGS dollars on the Interbank Market is failing to converge the black market rate and the official rate. So I wonder what new tricks Dr Mangudya is going to employ to achive that equilibrium.
RBZ (and we, the general people) wants the convergence of these markets so as to eliminate the arbitrage some companies and individuals are profiteering from. As a result, this practice is triggering day-to-day price hikes.
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5 comments
At this rate, we can safely say Goverñor vagumhirwa, and maybe a foreign RBZ Governor is what we now badly need to clean up the unorthodox and unconventional economic gymnastics at RBZ!
Makes no difference… He just following orders hence being given another 5yrs… She goes for mthuli …. The really architects are at shake shake house…aka ZANU
i doubt mangudyas brain will ever reach equilibrium with common sense !!
suppose the learned governor is correct. 11 August black market rate=340.45 to the dollar= official exchange rate.
As long as the bank do not have money to sell to anyone who requires forex, it mean people will go to the thriving black market, as forex is easily available there. This in essence means the purported eqquilibrium will never exist! If it does i will resign because i would have failed.
The only viable though painful option is to introduce a Zimbabwean dollar, peg it an a rate of say US$1.00=ZWD$40.00
then try to manage the two evil twins of fiscal and trade deficits. Then we can start talking. Otherwise Mangudya is just a pawn and the Queen and Kings are at Shakeshake and they dictate what he must say.
Very foolish indeed. Where on earth has that happened before. This is all very sickening to hear this from a so-called governor of a country’s RBZ. This is very concerning as with this sort of governor there is no bright future for many people.