Online Reporter
Business Reporter
The Reserve Bank of Zimbabwe (RBZ) is developing an algorithm-based electronic foreign exchange trading system designed to remove manual intervention from the price discovery process and enhance transparency in the currency market.
Presenting the 2026 Monetary Policy Statement, Governor Dr John Mushayavanhu, outlined the central bank’s vision for a modernised trading platform that would automate the determination of exchange rates, moving away from the current manual collection of data from commercial banks.
“I think that the central bank and the determination of the exchange rate—I can tell you that all we do as the central bank is to collect trends that would have been traded by the market every day,” Dr Mushayavanhu explained. “We say to this bank: how much did you buy and at what rate? How much did you sell and at what rate? You do the same to the next bank, and then we calculate the weighted average.”
The Governor acknowledged the limitations of the current approach, which relies on banks voluntarily submitting their transaction data. He argued that an automated system would deliver more accurate and market-reflective pricing.
“The market does not deliver itself,” he said. “So, we have said let’s remove the manual elements to ensure that price determination and price discovery is done in an electronic manner.”
Dr Mushayavanhu provided details of the proposed platform, describing it as a significant technological upgrade to the country’s foreign exchange infrastructure.
“So, as a central bank, we are developing a foreign exchange trading system, which is going to be algorithm-based,” he announced. “You go into that system anonymously. They sell, we buy—orders will be matched. And only after the orders have been matched will you know who you have traded with, and you settle.”
The anonymous order-matching mechanism is designed to prevent collusion and ensure that trades occur at fair market prices, determined by the interaction of genuine supply and demand rather than administrative fiat or bilateral negotiations.
The Governor confirmed that the system is already at an advanced stage of development, with commercial bankers actively participating in its refinement.
“This system is currently being developed. Some of the bankers here will tell you that they would have been involved in user acceptance testing,” Dr Mushayavanhu said. “They have come back to us with some very useful comments on how we can improve the system. We are working on those comments.”
In a move designed to bolster confidence in the platform’s integrity, the RBG plans to subject the finished system to independent scrutiny by an unnamed international organisation before going live.
“Once we have perfected the system, it is going to be subjected to validation by a reputable international organisation. I won’t mention them—they are here—but we are not just going to say we have developed it on our own and it’s OK. We want the system to be validated.”
“Once it has been validated, we will release it and we start trading electronically,” the Governor confirmed, signalling that the era of manual rate determination in Zimbabwe’s foreign exchange market is drawing to a close.
The introduction of the algorithm-based trading platform represents a significant step in the central bank’s broader strategy to enhance policy credibility and entrench macroeconomic stability. By automating price discovery, the RBZ aims to eliminate perceptions of administrative interference in the exchange rate while ensuring that the official rate more accurately reflects underlying market conditions.
The move has been welcomed by banking sector representatives who participated in the testing phase, though market participants will await the system’s international validation and eventual go-live date before assessing its impact on liquidity and price formation in the interbank market.
