Zimbabwe’s central bank reassures that there is no forex crisis as only $15 million of a $20 million auction was purchased, reflecting stable demand. Business leaders call for the free-floating of the ZiG, a gold-backed currency, which faces challenges in gaining acceptance despite its potential benefits.
The Governor of Zimbabwe’s central bank, John Mushayavanhu, has reassured citizens that the nation is not experiencing a foreign exchange crisis. He pointed out that in a recent market intervention, the bank made $20 million available in foreign currency, but only $15 million was actually purchased. This indicates a stable demand within the market and implies sufficient foreign currency reserves to satisfy market needs despite existing anxieties regarding currency shortages.
In light of ongoing economic challenges, prominent business leaders are advocating for the government to permit the local currency, a gold-backed unit referred to as ZiG, to float freely. This shift could address the current economic concerns and enhance market efficiency. The introduction of the ZiG is seen as a potential solution to the dwindling confidence in the local currency, yet it has faced challenges in gaining public acceptance and trust.
In summary, the central bank’s assurance of sufficient foreign currency reserves aims to mitigate fears of a forex crisis, while suggestions from key businesses to allow the ZiG to float indicate a search for solutions to rebuild market confidence. The success of the ZiG remains uncertain as it competes against skepticism from the public and market participants.
Original Source: www.africa.com
