By Alois Vinga
LOBBY group, Confederation of Zimbabwe Industries (CZI) has bemoaned the inadequate foreign currency on the interbank market due to scarce resources from limited exports.
The Interbank market is a platform where banks and other stakeholders with foreign currency resources trade freely on a Willing Buyer Willing Seller (WBWS) basis. Foreign currency generated from the export surrender requirements is also channeled to the platform.
However, CZI’s Inflation tracker has revealed that companies are struggling to secure adequate foreign currency resources from the platform.
“While the official exchange rate is stable, the main challenge is for businesses to get access to foreign currency at the willing buyer-willing seller platform for genuine import requirements.
“There is not enough foreign currency to meet the demand from business, as it is largely the foreign currency from the surrender requirements that is available for sale. There is largely one willing seller; government, with several willing buyers,” said CZI.
Market watchers have blamed other key players in the economy for holding on to their foreign currency taking advantage of the greenback’s impact as a solid store of value in the face of unforeseen economic upheavals.
Zimbabweans have also developed a culture of stocking the US$ following the 2008 hyperinflationary era.
In a bid to ease the market’s temptation to invade the parallel market for US$ sourcing, RBZ governor Doctor John Mushayavanhu last week revealed the central bank injected foreign currency into the Interbank market to ease demand.
“In recent weeks, the Reserve Bank has witnessed a build-up in pipeline demand for foreign currency at banks, thus putting undue pressure on the foreign exchange market. In light of the above, the Reserve Bank is immediately injecting over US$50 million into the interbank foreign exchange market guided by the obtaining pipeline demand at banks as of 25 July 2024,” he said.
The RBZ governor allayed US$ shortage fears saying the country currently has four times cover of the reserve money built up from April 2024.
