After struggling to stabilise its currency for the past three years, Zimbabwe on Tuesday turned to a foreign exchange trading system it last used in 2004.
The southern African country was set to introduce a Foreign Exchange Auction System to determine the Zimbabwe dollar exchange rate after the previous systems – namely a currency peg and a managed float – failed to stabilise the Zimbabwe dollar.
Reserve Bank of Zimbabwe Governor Dr John Mangudya said last week the auction system would operate on the Reuters Forex Trading platform, a real-time electronic trading system.
The auction system is not new to Zimbabwe, as currency instability back in 2004 saw the country introduce the same system.
Economist and Reserve Bank of Zimbabwe Monetary Policy Committee member Eddie Cross said what the market needed for the auction system to be successful was "confidence in the process and transparency".
