africa Currency Zimbabwe

Zimbabwe central bank tightens rules for currency exchanges

Zimbabwe’s central bank has tightened the rules governing the trade of foreign currency by money exchange offices with immediate effect.

The rates offered by exchange offices must be 7% above or below the interbank mid-rate, the central bank said in an emailed statement. Failure to comply would result in either heavy financial penalties or license revocation, it said. The southern African nation has 200 licensed exchange outlets.

Since a parity peg to the US dollar was dropped in February, the local currency has slumped to 14.43 to the dollar, making it the world’s worst performer. It’s even weaker on the parallel market at 20.3 versus the U.S. currency, according to marketwatch.co.zw, a website that tracks unofficial rates.

The government earlier this week declared a state of disaster, threatened by the country’s worst-ever famine after harvests were hit by a drought and cyclone-induced floods.

Source: Bloomberg

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