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Zimbabwe Effectively Lets Currency Slide With Interbank Rate

  • Interbank rate used widely to quote for goods and services
  • Southern African country had temporarily banned bank lending

Zimbabwe’s acceptance that most business will take place at a newly introduced interbank rate for the Zimbabwe dollar amounts to an effective devaluation of the local currency, a policy maker said.

The Reserve Bank of Zimbabwe introduced the interbank rate on May 9, two days after President Emmerson Mnangagwa temporarily barred banks from lending and introduced a raft of other measures in a bid to halt the plunge of the Zimbabwe dollar on the black market. The government sets its official rate at a weekly auction.