Zimbabwe’s Central Bank Affirms Forex Stability Amid Calls for Currency Reform

Zimbabwe’s central bank governor has confirmed no foreign exchange crisis exists, asserting adequate forex reserves are available. Recent market intervention revealed a lack of demand for offered foreign currency. Key businesses have pushed for the free float of the gold-backed currency, ZiG, to enhance economic stability.

John Mushayavanhu, the governor of Zimbabwe’s central bank, has reassured citizens that the nation is not currently experiencing a foreign exchange crisis. During a recent intervention in the market, he stated that the central bank made $20 million available in foreign currency, out of which only $15 million was taken up. This reflects the existing demand in the marketplace and signals that Zimbabwe possesses adequate foreign currency reserves to satisfy market requirements, despite lingering fears of currency shortages.

In light of these developments, prominent businesses have been vocal in appealing to the authorities for the liberalization of the local currency. They advocate for a more flexible approach to the gold-backed currency known as ZiG, highlighting concerns regarding its acceptance and use in the economy. The push for a free-floating exchange rate indicates a desire for a more adaptable financial system that could foster greater economic stability.

In summary, Zimbabwe’s central bank is well-positioned with sufficient foreign currency reserves, as indicated by the recent sale of foreign exchange. The call from key businesses for a free-floating gold-backed currency emphasizes the need for economic reform and greater flexibility in currency management to enhance confidence and stability within the financial system.

Original Source: iafrica.com