Zimbabwean banks are struggling to meet exporters’ foreign currency demands for importing raw materials due to severe liquidity constraints.
In an interview with The Independent, Fanwell Mutogo, CEO of the Bankers Association of Zimbabwe, said that the ongoing foreign currency shortages have hindered banks’ ability to support both exporters and importers effectively. He said:
The insufficient foreign exchange has had an impact on the importers and exporters, hence hindering the banks to meet the needs and demands of both exporters and importers.
Mutogo said the situation might improve if the recently introduced Zimbabwe Gold (ZiG) currency gains value. He said:
As the market accepts ZiG and uses it more for domestic transactions, banks are most likely to receive more voluntary foreign currency sales.
Economist Prosper Chitambara said that building Zimbabwe’s foreign currency reserves is essential. He said:
We look at several countries. South Africa has about US$62 billion in terms of reserves, Zambia has about US$4 billion, and Botswana, has about US$5 billion. So, Zimbabwe with about US$400 million, is probably not adequate.
So, I think we need to build our reserves, and we can always use those reserves again to liquidate in the interbank market.
On Friday, Reserve Bank of Zimbabwe Governor John Mushayavanhu announced that reserves backing the structured currency, primarily gold, had risen significantly to US$375 million in June, up from US$285 million.
In his 2024 Mid-Term Monetary Policy Statement, Mushayavanhu said the central bank is implementing a strategy to build foreign reserves until they meet international standards. He said:
Given the importance of foreign currency reserves in sustaining the ZiG, the Reserve Bank has a reserves accumulation strategy to ensure adequate foreign reserves are available.
The Reserve Bank will, therefore, remain resolute on its accumulation strategy until the country’s foreign reserves reach internationally acceptable levels.
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