Zimbabwe lost $2 billion on 1:1 forex exchange rate
By Staff reporter | 22 Feb 2019 at 23:12hrs
GOVERNMENT lost $2 billion last year for maintaining the parity between the bond note and the United States dollar, Finance and Economic Development Minister Mthuli Ncube has said.
Economists had warned government that the bond note, which was introduced as an export incentive in 2016, was not at par with the greenback despite insistence to the contrary by monetary authorities.
On Wednesday, central bank chief John Mangudya introduced an interbank foreign exchange market for the trading of the greenback with RTGS dollars dumping the 1: 1 parity that has been in existence since 2016.
While presenting his MPS review, Minister Mthuli accepted that the 1:1 cost the country dearly in the process and is regrettable.
"We lost a total of $2 billion last year on the 1:1 forex exchange rate. We were killing the goose that was laying the golden eggs. By formalising and liberalising the exchange rate we will enable market and banks to lead the way as far as the forex exchange rates concerned," Ncube said at a breakfast meeting on Friday.