Zimbabwe Central Bank Ensures Adequate Foreign Currency Reserves, Urges Legal Transactions

April 12, 2024
RBZ | Report Focus News

HARARE – Reserve Bank of Zimbabwe Governor, John Mushyavanhu, assured that the central bank has ample foreign reserves to meet the demands of all legitimate businesses, urging them to steer clear of the black market for their foreign currency needs.

During an interview with Zimpapers Television Network on Thursday, Mushyavanhu highlighted that businesses should purchase foreign currency through their banks using the local currency, ZiG, or US dollars, rather than fueling illegal markets. This statement comes amidst reports of a surge in the street exchange rate to ZiG18 per US$1 since the introduction of the new currency.

The central bank has transitioned to a market-determined exchange rate system, phasing out the auction system in favor of an interbank foreign exchange market. According to Mushyavanhu, this is expected to stabilize prices and reduce the black market’s influence.

In a candid moment, Mushyavanhu questioned the necessity of resorting to the black market: “If you have a legitimate foreign currency obligation, whether for services, school fees, or imports, you should be able to secure your funds through your bank on a willing seller-willing buyer basis.”

However, when probed about the inability of ZiGs to be used for essential services like fuel purchases and passport fees, the governor pointed to the predominance of the US dollar in the economy, noting that 80 percent of transactions are dollar-based.

Mushyavanhu also pushed for an expedited update of banking systems to facilitate transactions in ZiG, urging banks to resolve technical delays by the end of the week. He expressed concern over the slow pace at which some banks’ systems are adapting to the new currency requirements, despite the urgent need for economic stability.

In a related development, presidential spokesperson George Charamba commented on social media about the ongoing debate over the usage of ZiG for all purchases, suggesting that a shift back to a single currency could be a logical outcome of such arguments.

The recent changes from the Zimbabwe dollar to ZiG have introduced a degree of confusion and uncertainty among businesses, requiring adjustments in financial systems, pricing structures, and accounting practices to accommodate the new currency format. The central bank’s firm stance aims to mitigate these challenges and foster a stable economic environment.