The Reserve Bank of Zimbabwe has put reins on mobile money and tightened rules on foreign exchange in an attempt to control its failing monetary system. Additionally, Zimbabwe has banned quoting of prices in any currency besides its dollar.
The bank has stopped mobile money operators from paying out cash some operators charge a premium of up to 60%, therefore creating an implied exchange rate.
“We decided to close that gap of multiple exchange rates,” revealed Minister Mthuli Ncube.
At the same time, the bank has reduced the range at which the country’s bureaux can exchange its dollar. According to Bloomberg, forex dealers in the country will now exchange the Zimbabwe Dollar between 3-5% from the official rate, down from the earlier 7%.
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Additionally, independent experts believe that the government is under pressure to re-dollarize, after several years of using the US dollar.
“Government is trying to control the sale of foreign currency, trying to control the parallel rate to avoid further inflation,” said Derek Matyszak.
The tight regulations come to rescue the country’s inflation after a long period of inflation. According to Aljazeera, the country’s inflation rate almost hit 300% in August 2019. Zimbabwe is now set for its first contraction since 2008.
