The Reserve Bank of Zimbabwe (RBZ) has abandoned the fixed-rate system and said it would allow the rate to be set by an auction system.

In a statement the RBZ said from the 23rd of June weekly auctions will be held to determine the exchange rate.

Authorised currency traders will be required to serve all importers and users of foreign currency in between auction days at the prevailing market rate.

The new system is set to result in a narrowing of the gap between the official rate and cost of currency on the black market, which has risen to almost four times the fixed rate. With authorities optimistic that it will bring an end to the parallel market.

Meanwhile, the government says bond notes are still legal tender with a statement on how they will be phased out set to be issued soon following reports that some sectors of the economy are rejecting the bond notes.

This was said by Finance and Economic Development Minister, Professor Mthuli Ncube while responding to questions in Parliament this Wednesday.

“Bond notes are still legal tender but the government will soon issue a statement on the gradual phasing out of the bond notes, people who receive them can approach banks and exchange them for the new notes,” said Prof Ncube.

Another pertinent issue that came under the spotlight is how the government is addressing the economic fundamentals against inflation.