The Zimbabwean economy has been characterized by several monetary and fiscal challenges, hyperinflation, liquidity constraints, deindustrialization and high interest rates. As a consequence, the monetary authorities introduced some monetary policy measure to counterpart these raising rates to solve the aforementioned economic challenges.

At the beginning of the month of August up to the third week of August we see that there was a slight stability of rates due to the monetary policy measures which were endorsed in the market by the Government. It was then noticed that there were some positive effects caused by this measure as inflation on a monthly basis dropped to negative 15.3% from 74,5% it was in June, hoping appositive effect this month as well. The bank rate policy rate has since in June remained unchanged at 150%. 

Throughout the month of August there was a zero-percentage increase or decrease in the parallel market rate. The rate remained at ZWL$ 6 100 for the first three weeks of August and there was a slight increase in the RBZ auction rates of about 0.7% increase from ZWL$ 4 542 as at 08 August 2023 to ZWL$ 4 577 as at 22 August 2023. This stability of exchange rates at some point was due to the unavailabity of the local currency in the market making exchange rates drop a little better.

As at 29 August, there was a slight increase of rates both in the parallel market and in the RBZ auction rates. The RBZ rate this week was ZWL$ 4 604,  and the parallel market rate was  ZWL$ 6 500. This slight increase was due to elections. It can then be derived that the parallel market rate increased by 6.6%, whilst the RBZ auction rate has increased by 0.6%.

There is a belief that due to the election phase that the country is in, rates might start to escalate like how they were inflating in the second quarter.