Zimbabwe Finally Scraps Forex Rule Forcing Businesses To Use Official Exchange Rate After False Starts
Zimbabwe has finally repealed the controversial foreign exchange rule that forced formal businesses to use the official exchange rate when pricing goods and services.
The change was confirmed through Statutory Instrument 34 of 2025, published in the Government Gazette on 15 April 2025. This repeals Statutory Instrument 81A of 2024, which had previously restricted businesses from using more favourable market rates.
A major shift after months of confusion
In a post on X (formerly Twitter), the EU Ambassador to Zimbabwe, Jobst von Kirchmann, welcomed the move:
“The Zimbabwean Minister of Finance, Economic Development and Investment Promotion has today repealed Statutory Instrument 81A of 2024, which imposed restrictive foreign exchange pricing requirements on formal businesses, compelling them to use the official exchange rate and putting them at a disadvantage relative to informal operators.”
He added:
“Its repeal represents a significant and welcome step toward further liberalisation of the foreign exchange market… This track… forms a critical pathway for Zimbabwe to move toward comprehensive debt restructuring and access to international financing.”
“Freedom of implied rate”
Business leader Busisa Moyo also reacted positively:
“Freedom of implied rate in pricing goods & services is a step in the right direction. Market competition will now take effect when it comes to trading in local currency. This is a major economic reform for business operators in Zimbabwe.”
The rule had become a major issue for formal retailers, who were forced to sell at less competitive prices compared to informal traders who used parallel market exchange rates. This left formal businesses struggling to keep up.
With the repeal, businesses are now able to price their goods and services differently potentially narrowing the gap between formal and informal markets.
RBZ clarifies: “No business can set its own ZiG rates”
In March, there was confusion when RBZ Governor John Mushayavanhu was quoted saying businesses could set their own USD-to-ZiG exchange rates.
But the Reserve Bank of Zimbabwe (RBZ) issued a clarification on 12 March 2025, stating:
“The market is free to price their goods and services at whatever USD to ZiG rate they prefer without being limited to using the official RBZ exchange rate,” Mushayavanhu had initially said.
However, the RBZ later explained:
“For clarity, ‘market determined rate’ simply means a rate determined on the interbank foreign exchange market based on foreign currency supply and demand… Therefore, no other business entity outside the interbank market should determine the exchange rate.”
According to the RBZ, while banks can set margins in line with global practices, individual businesses cannot create their own exchange rates. They must rely on rates set in the interbank market.
This clarification came as part of the broader effort to transition to a Floating Exchange Rate System introduced with the February 2025 Monetary Policy Statement.
What it means for consumers
For ordinary Zimbabweans, this change could bring both relief and uncertainty.
With businesses now allowed to use market-based exchange rates, prices of goods may fall slightly as retailers get more value from foreign currency sales. More products could return to supermarket shelves as formal businesses compete more fairly with the informal market.
However, short-term price fluctuations are likely due to exchange rate volatility.
Over time, the government hopes the reform will stabilise prices, encourage formal business growth, and attract international financial support by aligning Zimbabwe’s policies with global economic standards.
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The post Zimbabwe In Another U-Turn: Finally Allows Businesses To Use OWN ZiG Rates Instead Of Official Rate After Repealing Forex Law appeared first on iHarare News.
