Zimbabwe has abandoned its strictly controlled foreign exchange rate regime and adopted a managed float” exchange rate regime with immediate effect.

Under the new regime, banks will take a bigger role in the trading of foreign currency, narrowing the gap with the unofficial market by allowing trade on a more transparent platform.

“This platform will allow foreign exchange to be traded freely among banks and permit a true market exchange rate to be determined,” Finance Minister Mthuli Ncube said.

The Zimbabwe dollar officially traded at par with the United States dollar until October 2018 but has since fallen to 39:1 on the black market and 18:1 on the interbank market.

The volatility of the Zimbabwe dollar has seen prices rocketing as they continue to be pegged on the United States dollar.

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