The Zimbabwe National Chamber of Commerce (ZNCC) has warned the government that the country’s foreign currency reserves, which stand at US$540 million, are insufficient to cover even one month of imports.
The warning comes as Zimbabwe faces a growing financial crisis, with the country being unable to access new credit lines from global lenders and its national debt soaring to US$21 billion.
In its latest industry and commerce report, released this week, the ZNCC said that Zimbabwe’s imports in October 2024 alone amounted to US$835.8 million, surpassing exports, which totalled US$698.1 million.
This growing disparity further exacerbates the country’s foreign currency shortage and deepens its economic challenges. Reads the report:
<blockquote>
Zimbabwe’s current foreign exchange reserves, amounting to approximately US$540 million as of 31 October 2024, are far from sufficient to inspire confidence.
While this figure reportedly provides more than three times the reserve money cover, it pales compared to the country’s import needs.
For perspective, Zimbabwe’s imports in October 2024 alone totalled US$835,8 million, significantly higher than exports, which amounted to US$698,1 million.
This means the country’s official reserves are insufficient to cover even one month’s import bill, raising serious concerns about the sustainability of the nation’s foreign currency management and the goal of exchange rate stability.
</blockquote>
While presenting the 2025 National Budget last Thursday, Finance Minister Mthuli Ncube announced that Zimbabwe’s foreign currency receipts had risen by 17.9%, reaching US$10 billion in the first nine months of 2024, up from US$8.5 billion during the same period in 2023.
This increase was largely attributed to higher export receipts and diaspora remittances, which contributed 59% and 25% of the total inflows, respectively.
However, in its latest report, the ZNCC expressed concern over the lack of confidence in the ZiG, which was introduced in April, by both households and businesses. It said:
<blockquote>
The policymakers’ statements regarding the expedited de-dollarisation framework following the new currency’s launch have further discouraged households and businesses from holding onto the ZiG for extended periods.
This reaction is rooted in memories of the policy steps taken in 2019 under similar circumstances.
Moreover, with the government being the largest employer and the ZiG essentially functioning as a ‘small change’, civil servants, other employees, and employers — whose incomes are predominantly in ZiG — face challenges.
Despite earning in ZiG, they must pay for essentials such as transportation, fuel, rent, and groceries, which are generally cheaper in US dollars.
As a result, many are offloading their ZiG earnings on the parallel market, irrespective of the prevailing rate, while others are offloading their ZiG balances on the formal market, taking advantage of the rate differentials.
</blockquote>
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The Zimbabwe National Chamber of Commerce warns that Zimbabwe's foreign currency reserves are not enough to cover even one month of imports. The country's imports in October 2024 exceeded exports, deepening the financial crisis. Despite an increase in foreign currency receipts, there is concern over lack of confidence in the new currency introduced in April. Many people are offloading the new currency on the parallel market due to challenges in using it for everyday expenses. This situation raises doubts about the country's foreign currency management and exchange rate stability.

Zimbabwe’s US$540 Million Forex Reserves Not Enough To Cover One Month, Warns ZNCC

Reserve Bank of Zimbabwe (RBZ) Governor John Mushayavanhu has said that Zimbabwe’s foreign currency reserves have risen to over US$500 million, roughly three times the total amount of Zimbabwe Gold (ZiG) in circulation.
Since the September devaluation, the ZiG has gained ground against the US dollar, appreciating from US$1:ZiG27,4 at the end of October to US$1:ZiG25,6 by Friday.
In an interview with <a href="https://www.sundaymail.co.zw/foreign-currency-reserves-rise-to-us500m">The Sunday Mail</a>, Mushayavanhu attributed the strengthening of the ZiG to a range of measures, including the central bank’s decision to raise its benchmark interest rate from 20% to 35% in September.
This was done to curb inflationary pressures and tighten liquidity in the market.
Furthermore, the RBZ introduced changes to the statutory reserve requirements, setting them at 30% for both demand and call deposits in local and foreign currencies. For savings and time deposits, the reserve requirement was set at 15%. Said Mushayavanhu:
<blockquote>
The combined effect of these measures has significantly reduced ZiG liquidity in the market.
The exchange rate has also strengthened, benefitting from increased foreign currency receipts.
</blockquote>
Zimbabwe’s foreign currency receipts increased by 18% during the nine months leading up to September, compared to the same period the previous year. Added Mushayavanhu:
<blockquote>
The ZiG:US dollar exchange rate has, therefore, been appreciating under the willing-buyer, willing-seller arrangement, in line with market fundamentals, reflecting the supply and demand dynamics of foreign currency on the interbank market.
The tight ZiG liquidity conditions amid a tight monetary policy stance in the market have seen increased willingness by economic agents to liquidate their foreign currency positions, thereby creating demand for ZiG.
These conditions have largely contributed to the appreciation of the currency.
Currently, the total reserve money in local currency as of November 6, 2024 is about ZiG3,4 billion, which is about US$129 million, against foreign currency reserves of US$509 million.
The Reserve Bank’s total foreign currency reserve holdings of more than US$500 million as at November 1, 2024 are also more than the total bank deposits in the domestic currency of about ZiG12 billion — giving an implied exchange rate of around US$1:ZiG24.
The Reserve Bank has, therefore, since April 5, 2024, consistently held more than sufficient reserves to back the ZiG currency to ensure its stability.
</blockquote>
Mushayavanhu said the Reserve Bank will continue to intervene in the foreign exchange market by utilising 50% of the 25% export surrender requirements.
This intervention aims to support smooth market operations, meet legitimate foreign payment demands, and strengthen reserve holdings to maintain the stability of the Zimbabwe Gold (ZiG). Said Mushayavanhu:
<blockquote>
The full backing of the local currency reserve money ensures that at each point the Reserve Bank has adequate foreign currency reserves to intervene in the market and ensure the stability of the local currency.
Currently, the Reserve Bank reserves have topped US$500 million, which implies more than three times the cover of reserve money.
</blockquote>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Zimbabwe has a lot of foreign currency saved, more than US$500 million. This is three times the amount of their local currency, Zimbabwe Gold (ZiG), in circulation. The value of ZiG compared to the US dollar has gone up recently. The Reserve Bank of Zimbabwe made some changes to help make the ZiG stronger and more stable. They also have enough reserves to support their currency. This is good for the country's economy and helps keep everything in balance. It's important to have enough foreign currency saved to keep the local currency strong and stable.

Forex Reserves Hit US$500 Million, Three Times The ZiG In Circulation, Says RBZ

Prominent investigative journalist Hopewell Chin’ono has said Information, Publicity and Broadcasting Services Minister, Monica Mutsvangwa was either lying or was misinformed when she said Zimbabwe currently has over US$1 billion foreign currency reserves.
Mutsvangwa made the remarks during a three-day workshop in Gweru with journalists from various media houses. <a href="https://www.herald.co.zw/just-in-min-mutsvangwa-meets-media-fratenity/" rel="noopener noreferrer" target="_blank">The Herald</a> quoted Mutsvangwa saying:
<blockquote>For the first time in decades, we now have over $1 billion in forex reserves in just two years, it summarises the robust changes brought about by the Second Republic since the November 2017 Operation Restore Legacy.</blockquote>
However, Chin’ono said Mutsvangwa’s assertion is simply not true as there is a difference between money supply and foreign currency reserves.
Chin’ono said the US$1 billion Mutsvangwa was referring to is not forex reserve but money which is in circulation. He wrote on his Facebook page:
<blockquote>The Minister has just told a LIE… She is mixing terms either out of ignorance or deliberately to mislead the unsuspecting citizens/public.
It is either she has been misinformed, or she is plainly engaging in propaganda.
Money supply and forex reserves are 2 different things.
She is saying that there is US$1 billion today in forex reserves. That is not true.
What she is talking about is money which is in circulation. That is called money supply or M2.
Tendai Biti left US$6.5 billion money supply/M2 when he was GNU finance minister.
Secondly, today they don’t have balance of payment reserves as the minister said.
The GNU had U$550 million balance of payment which covered 3 months.
Balance of payment is what is given to importers when they need it to settle debts outside the country.
Today forex reserve receipts are piling up at the Reserve Bank of Zimbabwe because they don’t have money.
So I don’t know what the minister is talking about!
Money supply is what we are using and is in circulation, that is not balance of payment or forex reserve!</blockquote>

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