President Emmerson Mnangagwa has expressed his confidence in the Reserve Bank of Zimbabwe’s (RBZ) recent devaluation of the Zimbabwean dollar (ZiG), describing it as a move that will foster “greater flexibility” in the foreign exchange market.
In his SONA address Mnangagwa emphasized that this policy shift will promote genuine price discovery while encouraging those holding foreign currency to transact through the official market channels.
“The devaluation is designed to bring flexibility, allowing market forces to determine the exchange rate more effectively,” the President said. “This approach will enable price discovery, which has been lacking, and bring greater transparency to the forex market.”
Mnangagwa also reassured citizens that the currency is sufficiently backed by reserves, downplaying concerns surrounding the recent volatility of the ZiG. He attributed the weakening of the local currency to speculative activities, rather than any structural issues with the economy.
The President’s comments come amid widespread concern over the depreciation of the ZiG, which has seen a significant decline in recent weeks. The RBZ’s move to devalue the currency is seen as a way to combat black market activities and align the official exchange rate closer to reality.
While Mnangagwa remains optimistic about the outcome of the devaluation, critics have questioned whether this measure will be enough to curb inflation and restore confidence in the local currency, with many Zimbabweans continuing to rely on foreign currencies for transactions.
