The Reserve Bank of Zimbabwe (RBZ) has announced an injection of US$50 million into the interbank foreign exchange market to alleviate ongoing liquidity issues.
This strategic move, effective as of July 25, 2024, aims to stabilize the escalating demand for foreign currency among banks.
Since April 5, 2024, the RBZ has been actively participating in the market under the Willing-Buyer Willing-Seller (WBWS) trading framework, enhancing the availability of foreign currency. Despite these efforts, recent weeks have seen a significant build-up in pipeline demand for foreign currency, which has placed considerable pressure on the forex market.
In response to the growing demand, and to prevent further strain, the RBZ is capitalizing on its strengthened foreign reserves, which currently stand at four times the cover of reserve money. This robust backing includes cash in circulation and bank deposits, providing a solid foundation for the latest financial intervention.
The RBZ’s involvement is part of a broader monetary policy initiative introduced in April 2024, aiming to consolidate the stability of the Zimbabwean currency. Governor Dr. John Mushayavanhu expressed satisfaction with the market’s response to the policies and reaffirmed the bank’s commitment to ensuring currency and exchange rate stability in Zimbabwe’s macro-economy.
