The Reserve Bank of Zimbabwe has admitted that it previously interfered in the operations of the interbank foreign currency exchange market.

The interbank market was introduced by the RBZ in its February 20, Monetary Policy and commenced with an initial set rate of 2.5 RTGS dollar to the United States dollar. At the time the parallel market rate was at around 4 to the dollar.

And although the Monetary authorities maintained that it had no hand in the interbank market, the official rate continued to lag behind the parallel market rate.

Yesterday RBZ acting governor Dr Jasmine Chipika indicated that the market was manipulated.

“The Reserve Bank under this new policy is no longer involved (in determining the inter bank rate). Its supply and demand at play,” she said.

The ‘admission’ comes as Treasury on Monday announced the removal of the multicurrency system through Statutory Instrument 142 of 2019.

The latest currency development has resulted in a weakening of the parallel foreign currency market, with that rate declining from highs of around 13 to the US dollar to around 8.

And as if on cue, local banks appear to be determining the rate on their own, with some banks offering rates higher or at par with the parallel market rate.

According to a snap survey carried out by Inside Business this afternoon, First Capital Bank (formerly Barclays Bank Zimbabwe) was offering the highest buying price at around 8.69 and selling at 9.14, with an average rate of about 8.9.

FBC Bank was the other financial institution that had a high rate as it was buying at 7.14 and selling at 7.5, with an average rate of about 7.3.

Observers say if the interbank market continues on free float, the parallel market can easily be stifled.