The Reserve Bank of Zimbabwe (RBZ) has injected US$50 million into the foreign exchange market in October to stabilize the newly introduced Zimbabwe Gold (ZiG) currency. Economic analysts praise this move as vital for reducing exchange rate fluctuations and ensuring liquidity, especially as the country approaches its agricultural and festive seasons.
Following a period of volatility from July to September, which the RBZ attributed to high demand for foreign currency amid limited supply, many turned to the black market, pushing rates higher and increasing prices.
RBZ Governor Dr. John Mushayavanhu explained that the bank’s interventions aim to balance supply and demand, particularly as the demand for foreign currency rises for agricultural purposes. In just three weeks of October, the RBZ injected about US$32 million and conducted a US$25 million foreign currency sale to meet the increased demand for the upcoming agricultural season.
ALSO READ: Chirimutsitu Primary School Hit by Sudden Storm As Students Escape Serious Injury
Despite these efforts, only US$19 million was taken up, indicating a liquidity issue among buyers. Economists, however, believe these interventions will stabilize the economy by providing necessary liquidity and preventing sharp swings in exchange rates.
The RBZ has noted a positive increase in foreign exchange trading activities, particularly among exporters needing to meet local payments. This stability is expected to boost confidence in the ZiG and support long-term planning across various sectors.
As Zimbabwe prepares for the agricultural season, the RBZ’s actions are deemed crucial for farmers to secure inputs like seeds and fertilizers, especially with potential weather disruptions on the horizon. The RBZ remains committed to maintaining a tight monetary policy to ensure economic stability moving forward. Reserve Bank of Zimbabwe
