The new foreign currency auction system, which commenced today has determined an interbank foreign currency rate of 57 to the US dollar.

Zimbabwe’s central bank, the Reserve Bank of Zimbabwe (RBZ) today introduced the new Foreign Exchange Auction System, as it moved to enhance transparency and efficient distribution of scarce foreign currency.

This effectively puts an end to the 25:1 peg, which was set in March when the impact of the novel coronavirus (Covid-19) pandemic began to be felt.

According to the results of the auction today, which were published by the central bank, amount available for auction today was US$10.3 million and the highest bid was at a rate of 100, whilst the lowest was at 25.5.

The weighted average rate was 57.3 which is now the official market rate until the next Tuesday’s auction.

Prior to adoption of the fixed rate system, the market had used the interbank market system since last February.

And prior to that Zimbabwe was utilizing a multicurrency regime since 2009, which was largely dominated by use of the US dollar.

The auction system will operate on the Reuters Forex Trading platform, a real-time electronic trading system.

Under the foreign currency auction system, bids will be submitted to, allotted and evaluated by the Reserve Bank of Zimbabwe with the offers for foreign currency while bids from buyers are submitted each Tuesday.