Govt says willing-buyer-willing-seller for forex but it’s more like fortunate-buyer-unwilling-seller

Leonard Sengere Avatar

The Zim govt announced that retailers are no longer allowed to offer discounts for those paying in USD. Instead, they shall accept both the USD and the ZW$ and use the interbank rate to price using the 2 currencies. In fact, use of the willing buyer willing seller rate is now mandatory by law.

Unfortunately, that rate is not as good as the govt would have us believe.

The Zimbabwean government has made it clear that the ZW$ is here to stay. Yes, they know that the local currency is in freefall but they reckon they can turn it around. In trying to do that it appears they are throwing everything at the wall to see what sticks.

While we all know that the ZS$ is fast losing value, not all agree on what it’s actually worth today.

The government has insisted that the RBZ’s auction rate is the accurate measure of the local currency’s value. It values US$1 at ZW$173 as I write this. [Now ZW$366 on the 28th of June 2022]

Most analysts have criticised the closed auction for not being representative of actual market sentiment. 

The black market rate says US$1 is equal to as much as ZW$410 [Now up to ZW$670 in June 2022]. The disparity with the auction rate says one of the rates is wildly off.

The government is looking to fix this exchange rate mess and their solution involves liberalising the formal exchange rate. So, I guess that’s their way of admitting that the auction is not open.

Willing buyer willing seller

One new interesting measure is the willing buyer willing seller directive. On the 4th of April 2022, the RBZ announced that:

Further liberalising the foreign exchange market by allowing banks to conduct foreign exchange transactions of up US$1 000 under an arrangement agreed upon between banks and the Bank and in terms of which individuals with free funds and entities/corporates holding foreign exchange in their foreign currency accounts (after meeting the statutory surrender requirements) shall be free to sell foreign currency to banks on a willing-buyer willing-seller-basis.


Apparently this arrangement has been a moderate success and the President announced that the limit is being revised up to US$5,000 a day and US$10,000 a week.

This sounds positive, a proper free market just like the black market is but through official channels. 

The President says this willing buyer willing seller exchange rate is the one which shall be used for price discovery in the economy.

Don’t sing praises just yet, a closer look reveals that not all is as it seems.

Willing buyer

As I write this, the interbank rate rate sits comfortably between the black market and auction rates at 1:280. [Now around 1:366 in June 2022, more or less converged with the auction rate]

That’s a head scratcher. If the interbank market is open, why are people not flooding to the banks to purchase USD? Why would people pay ZW$410 for a dollar on the streets if they can buy one at ZW$280 from the banks? [Why would someone pay ZW$670 on the streets instead of ZW$366 at the banks in June 2022?]

What you would expect to see is people bid on the interbank exchange, driving the price up until it matches the black market rate. 

Of course, that activity could in itself drive the black market rate down. Every person that gets their USD from a bank would represent one less buyer on the black market. Less demand = lower price.

So the fact that this is not what’s happening shows that the buyer is willing but unable to act on that willingness. One starts envying those that are able to buy USDs at 1:280 [ZW$366 in June]. Who are those lucky bastards able to buy at that rate? 

You can only get the USD from banks for ‘bonafide’ payments as prescribed by the RBZ priority list. Ah, there’s the catch we were looking for.

The average person can’t just walk up to a bank and ask to buy USD. You may have tried and been told the bank didn’t have any USD to sell to you. 

So who is buying?

A bank told me:

Kindly note that anyone qualifies to buy but it depends on the availability of the funds.

I then asked if all that was stopping me from scooping up USD at the lower interbank rate was availability of funds. Came the reply I expected,

Kindly note that it is based on willing buyer willing seller and it also depends what you would want to use the Usd for.

I noted it kindly. You have to tick some boxes to buy from banks. The RBZ clarified who can buy.

i. Buyers who need to make external/foreign payments. These are mostly just importing businesses.

ii. Individuals can access USD for education, medical expenses and importation of goods and services.

Banks will need to see invoices and statements confirming the amount payable. And they will make the payment directly to the supplier.

This takes me back to my teenage years when my mother demanded to see invoices before she would release a single dollar.

The government is working under the idea that we are or should be paying for everything else using ZW$. They ignore that the 2 greatest drivers of USD demand for the average person are rentals and value preservation.

The government maintains that landlords should charge in ZW$ but they don’t. Landlords, like everyone else, are looking to preserve the value of their meagre savings.

The government doesn’t regard our need to preserve value because they believe they can make the ZW$ great again, restoring its value preservation properties.

The above restrictions then mean most Zimbabweans will never get their required USD from the banks.

So, the demand that banks see is just a fraction of the actual demand in the market. Meaning the parallel market will remain vibrant and the interbank rate will never reflect the true market value of the ZW$.

Willing seller?

Who would sell their hard earned USD at 1:366 to banks when they can get ZW$670 for a dollar on the black market? Someone who has no choice, that’s who.

The RBZ spelled it out clearly.

…foreign currency holders with funds in their FCA accounts shall only be allowed to sell their foreign currency to the bank managing their account. For corporates, the amount to be sold…is net of statutory deductions such as surrender requirement on export receipts and domestic sales.


As if you needed any more reasons not to bank your USD. If ever your USDs make their way into a bank account you will only be able to exchange them for ZW$ using a low rate.

If you decide to spend the USD electronically you still lose out. The government raised tax on domestic forex transactions to 4%, compared to 2% on local currency payments.

So you can’t change currencies or spend the forex electronically. Thinking you’re clever you decide to beat the system and just withdraw the money then spend it as cash. 

The govt saw you coming a mile away. They raised withdrawal charges from 5 cents to 2% per transaction. But wait, that’s equal to the local currency transaction tax. So yeah, someone didn’t think this through. 

All these measures are meant to discourage forex withdrawals and promote use of the ZW$. As it stands they only work to make sure we never deposit our forex. Also to immediately withdraw any funds in our accounts as that only costs 2% as opposed to transacting electronically which costs 4%.

The actual sellers

Individuals can avoid the system but businesses can’t do that. At least not completely. 

Any exporting company has to liquidate some of its forex receipts at the interbank rate. Same goes for domestic forex sales. Large companies have to deposit their takings only to then exchange them for ZW$ at the interbank rate.

If these companies had their way they wouldn’t sell a single cent at the interbank rate so calling them willing sellers feels like salt to a wound. 

The govt forces them to sell their USD at a rate lower than the true market rate and then calls them willing sellers. Governments are gangster like that and it ain’t nothing you can do about it.

Before you say it’s fair because these large companies are able to buy USD at the auction rate, remember they don’t get all the USD they need from there. 

Fortunate buyers and unwilling sellers

This system is just as flawed as the forex auction system. It’s not a true market because the govt decides who gets to play. That right there means this system is a breeding ground for corruption

Banks have the power to choose who gets the cheap USD. Even if you manage to get the requisite documents to be able to buy the discounted USD you still have to get around the ‘availability of funds’ hurdle. 

Banks report that since the fortunate-buyer-unwilling-seller system was introduced they have purchased more forex than they have sold. Not a single soul in Zimbabwe is surprised.

This is not even ideal for the banks to be fair. When trading currencies the most important metrics are the spread and volume. 

A trader buying at 100 and selling at 120 is in the same position as when he buys at 740 and sells at 760. The difference between the buy price and the sell price, the spread, is what’s important.

Then volume is affected by price. So, although the spread is the same in the example above, if it’s the same product our trader would prefer to trade at the lower prices.

Meaning banks would prefer pushing massive volumes but are unable to because the govt limits the number of buyers significantly and sellers only trade the absolute minimum that keeps them out of trouble.

After all this you realise willing-buyer-willing-seller is a scam. It’s a system that benefits only a few and is hated by almost all players. So, unfortunately the true market remains the parallel market.

You should also read:

RBZ on suspension of bank lending. Partly drawn loans are suspended too. What is the rationale behind these decisions?

With lending suspended, banks will be okay but microfinance institutions likely to struggle

RBZ finally identifies actual cause of Zimdollar collapse but maintains old measures



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  1. Rodrick

    Me I get my USD trading on deriv,it’s not much but it pays my rent,I work in retail shop downtown.If you want to u can join deriv they accept ecocash using peer to peer 👇

  2. Rodrick

    Some people are making money trading forex don’t be left behind

    1. Make Money

      Great, so you dont lose money you only make money?

      1. Rodrick

        It’s all about your bank roll and the strategy you are using.

        1. Make Money

          Interesting. Would love to see Myfxbook Accounts of those doing it.

  3. Jack

    Thank you for using the term “Lucky B**tards”. That is the most accurate expression in this instance! 🙂

  4. Mentor

    This country is something else. Then they think they will beat the parallel.

    1. Barf!

      Watch, as yet another 3 or so zeros appear on our “currency”! Not so surprised though, the million, billion etc notes will be out shortly! More zpf incompetence, but then it’s what citizens have done nothing to stop, since at least 1985!

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