Reserve Bank of Zimbabwe (RBZ) governor John Mangudya said in a statement on Monday that fuel importers would, with effect from Tuesday, no longer access foreign currency from the central bank at the subsidised US$1:RTGS $1 exchange rate that they have been getting all along.
Instead, they are now expected to access funds for fuel imports at the prevailing interbank market exchange rate.
“This new position is necessary to promote the use of foreign currency and guard against arbitrage in the country,” he said.
The interbank market rate stood at US$1:RTGS $3.35, while the rate stood at US$1:RTGS $5.50 on a thriving foreign exchange black market.
The impact of the removal of the subsidy is expected to be an increase in the price of fuel, which will in turn trigger hikes of the cost of food and other commodities.
Fuel has been in short supply since the end of 2018 and a litre of petrol currently costs RTGS$3.45 while that of diesel is about RTGS$3.20.
The RTGS dollar is a new electronic currency called Real Time Gross Settlement dollar that was introduced in March when the RBZ decided to float the exchange rate.