Reserve Bank of Zimbabwe expects more foreign currency sellers to join the interbank market

The gazetting into law of the payment of quarterly taxes on a 50-50 basis in ZiG and US dollars will go a long way in increasing willing sellers of foreign currency on the interbank market, the central bank says in its latest monetary policy statement.

So far, most of the foreign currency has been sold by the central bank, putting pressure on the Zimbabwe Gold which plunged to an all-time low of 28.6829 on 1 November to a high of 25.2826 on 15 November. It has since gone down to 25.6014 yesterday but appreciated to 25.5639 today following the release of the monetary policy statement yesterday.

The black market rate has also stabilised at between 35 to 40;1.

The central bank devalued the ZiG, introduced in April, from 14:1 to nearly 25:1 on 27 September.

According to the monetary policy committee, the measures introduced in September have managed to tighten liquidity conditions and curtail speculative activities in the foreign exchange market. 

It said that the exchange rate and inflation have relatively stabilised since October 2024. 

“The stability is reflected in the significant narrowing of the exchange rate premium and deceleration of month-on-month inflation from 37.2% in October 2024 to 11.7% in November 2024,” the central bank said.

“The spike in month-on-month inflation in October reflected the once-off depreciation of ZiG against the US dollar in September 2024. 

“In the outlook period, inflation is expected to remain stable with monthly inflation moderating to pre-October 2024 levels. The stability in the exchange rate will also continue to benefit from foreign currency inflows which increased by 19.1% to US$11.05 billion during the 10 months to October 2024, compared to US$9.27 billion recorded for the same period in 2023.”

Below is the full monetary policy statement: 

Continued next page

(115 VIEWS)