Zimbabwe’s central bank asserts no foreign exchange crisis exists, with adequate reserves showcased by a recent forex intervention. Despite only $15 million being purchased from a $20 million offer, businesses are urging for a free-float of the ZiG currency to strengthen market confidence.
John Mushayavanhu, the governor of Zimbabwe’s central bank, reassured citizens that the country does not currently face a foreign exchange crisis. He mentioned during a recent market intervention that the bank offered $20 million in foreign currency, of which $15 million was eventually purchased. This reflects the existing demand in the market and implies that Zimbabwe possesses adequate foreign currency reserves to fulfill its market requirements despite concerns over shortages.
Additionally, there is an ongoing push from major businesses in Zimbabwe advocating for the central government to permit a free-floating exchange rate for the local currency. This currency, known as the gold-backed unit ZiG, is being promoted to stabilize the local economy. The movement toward free-floating currency may provide greater flexibility in addressing currency value fluctuations and enhancing market confidence.
In summary, while Zimbabwe’s central bank maintains that there is no forex crisis, the limited purchasing of foreign currency suggests caution in the market. The call for a free-floating ZiG by key businesses may facilitate economic stability and better reflect the currency’s value, highlighting the delicate balance the authorities must manage in the current economic landscape.
Original Source: www.africa.com
