Zimbabwe central bank develops algorithm-based forex trading system

The Reserve Bank of Zimbabwe (RBZ) is developing an algorithm-based electronic foreign exchange trading system aimed at eliminating manual intervention in exchange rate determination and enhancing transparency in the currency market.

Presenting the 2026 Monetary Policy Statement, Dr John Mushayavanhu outlined the central bank's plan to modernise Zimbabwe's forex infrastructure through an automated platform that will determine exchange rates electronically rather than relying on manually collected 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 said. "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."

He acknowledged weaknesses in the current system, which depends on banks voluntarily submitting transactional data, arguing that automation would produce more accurate, 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."

Under the proposed platform, banks and authorised dealers will enter buy and sell orders anonymously into the system. Trades will be matched automatically by an algorithm, with counterparties only revealed after orders have been executed and settlement is due.

"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," Dr Mushayavanhu explained.

The anonymous order-matching structure is designed to curb collusion and ensure that exchange rates are determined purely by supply and demand dynamics, rather than administrative controls or bilateral negotiations.

The Governor said development of the platform is at an advanced stage, with commercial banks already participating in user acceptance testing. Feedback from bankers is being incorporated into system refinements.

"Some of the bankers here will tell you that they would have been involved in user acceptance testing," he said. "They have come back to us with very useful comments on how we can improve the system. We are working on those comments."

To strengthen credibility, the RBZ intends to subject the completed system to independent validation by a reputable international organisation before it goes live.

"Once we have perfected the system, it is going to be subjected to validation by a reputable international organisation. 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," Dr Mushayavanhu said.

The central bank believes the introduction of an algorithm-driven trading platform marks a critical step toward improving policy credibility and entrenching macroeconomic stability. By automating price discovery, the RBZ aims to dispel perceptions of administrative interference and ensure that the official exchange rate more accurately reflects underlying market conditions.

While banking sector representatives involved in testing have welcomed the initiative, market participants are expected to closely monitor the system's international validation and eventual launch before assessing its impact on liquidity and price formation in Zimbabwe's interbank forex market.