Zimbabwe’s central bank dismissed concerns of a foreign currency shortage on Friday, insisting that US dollar reserves remain sufficient to meet demand, even as businesses push for the country’s gold-backed Zimbabwe Gold (ZiG) currency to be allowed to float freely.
Reserve Bank of Zimbabwe Governor John Mushayavanhu said the market had ample forex liquidity, citing a $20 million foreign currency auction by the central bank a day earlier, where banks only purchased $15 million—an indication, he said, that demand was not outpacing supply.
“If there is anyone with an import invoice or foreign payment that has not been processed, they can go to their bank, and it will be honored. We don’t have a foreign exchange problem,” Mushayavanhu told state broadcaster ZTN.
His remarks come amid growing pressure from businesses that argue the ZiG, introduced in 2024 and backed by gold reserves, should be allowed to trade freely on the market. Critics warn that the government’s efforts to manage the currency’s value could artificially constrain US dollar liquidity, potentially affecting trade and investment flows.
Businesses Push for Market-Driven Exchange Rate
Since its introduction, the ZiG has been positioned as a stabilizing force for Zimbabwe’s volatile currency system, replacing the heavily devalued Zimbabwean dollar. Authorities have maintained a managed exchange rate, but major companies now argue that the currency should be left to float freely, allowing supply and demand to determine its value.
While the government insists that a controlled approach ensures stability, businesses warn that exchange rate rigidity could discourage investment and fuel uncertainty in key sectors. Some economists have also suggested that allowing the ZiG to trade freely could boost confidence in the financial system, provided that adequate foreign reserves are maintained.
Despite calls for a shift in policy, the central bank has so far resisted the push for a market-driven exchange rate, maintaining that current measures ensure forex availability while preventing sharp fluctuations in the currency.
