HARARE – The Reserve Bank of Zimbabwe (RBZ) has reported that the new Zimbabwe Gold (ZiG) currency has achieved a 91% acceptance rate among businesses and the public.
The central bank governor, John Mushayavanhu, in his mid-term monetary policy review statement, announced on Friday, attributed this success to the currency’s stability, increased foreign currency receipts, and effective monetary policy actions.
“The strong foreign currency receipts continued to support the country’s balance of payments position, which is anticipated to record a current account surplus for the sixth consecutive year since 2019.
“A strong external sector position will in turn foster sustained exchange rate stability,” Mushayavanhu said.
“The financial sector and national payment systems have remained safe and sound to support seamless financial transactions in the economy.
“The favourable monetary and financial conditions have created a conducive environment for sustained economic growth which is projected to be 2% in 2024.
“The Reserve Bank’s monetary policy stance and the ZiG currency have, therefore, served the country well in fostering price and exchange rate stability and engendering confidence in the economy.”
The central bank has announced plans to increase cash injections into the market while controlling money supply growth.
The RBZ has also introduced measures to promote digital payments, including exempting electronic transactions under US$10 from bank charges starting from September 2024.
The bank has also replaced non-negotiable certificates of deposits (NNCDs) with tradable government bonds to support companies’ liquidity needs.
Zimbabwe’s economy is projected to grow by 2% in 2024, driven by favorable monetary and financial conditions. The country’s foreign currency receipts have increased by 9.5% in the first half of 2024.
Mushayavanhu also noted that Zimbabwe’s banking sector provided robust support to the economy’s productive sectors by offering working capital. He noted that as of June 30, 2024, loans to productive sectors accounted for 72.01% of total loans.
The RBZ also plans to issue tradable government bonds to companies owed from the foreign currency auction and the 25% surrender requirement.
“All outstanding payments for foreign exchange purchased by Treasury under the 25% surrender requirements and all outstanding auction allotments during the transition period from ZWL to ZiG which were supposed to be issued with NNCDs for one (1) year and 24 months, respectively have been refined from NNCDs to tradable Government bonds,” Mushayavanhu noted.
The central bank has also committed to maintaining “prudent” money supply management and a “well-calibrated” monetary policy stance to ensure currency and exchange rate stability.
The approach is expected to yield positive results, including an annualised inflation rate of less than 5% by the end of the year.
“The Reserve Bank remains strongly committed to ‘walking the talk of prudent money supply management and ensuring that the monetary policy stance is well-calibrated and engenders the desirable conditions of currency and exchange rate stability in the economy,” Mushayavanhu said.
“As a result of adherence to the key policy imperatives, the economy is envisaged to realise the expected annualised inflation path of less than 5% by year-end.
“Merchandise exports are projected to close the year at US$7 330.4 million, a 1.8% increase from 2023, whilst merchandise imports are likely to end the year at US$8 999.4 million, a 4% increase compared to 2023.
“The country’s current account balance is expected to slightly narrow from a surplus of US$133.9 million in 2023 to a surplus of US$44.5 million in 2024.”
