RBZ At Loggerheads with Industrial Leaders Over the Zimbabwean Dollar

Reserve Bank of Zimbabwe (RBZ) is now at loggerheads with the Confederation of Zimbabwe Industries (CZI) on the stabilisation of the Zimbabwean Dollar.

Zimbabwe’s Central Bank says the contents in CZI’s Urgent Engagement Paper on the Deteriorating Currency Situation are a response to rumours and not based on facts on the ground.

“The contents of the said CZI paper and the impressions depicted therein are unfortunate and uncalled for as they have the potential of destabilising financial markets and economic stability of the country,” RBZ governor John Mangudya said.

“The Bank has also noted with serious concern that CZI has published the paper without engaging it to establish the veracity of the rumours that motivated the paper. Consequently, CZI has created a negative impression that has the effect of stocking market confusion and inflation.”

CZI’s paper argues that the RBZ auction system should be suspended until the backlog on foreign currency allocating is cleared and published.

The industrial leader also says getting the price of foreign currency right is a fundamental matter of Zimbabwe’s economic development interest.

“Mono currency ZWL without international reserves should not be done as the economy is not ready for mono currency,” the engagement paper says.

“Foreign currency accounts should not be raided as has happened before with serious consequences of loss of value at all levels of business and society.”

Responding to the paper, the RBZ Governor said all foreign exchange accounts are safe and the Central Bank has no reason or appetite to “raid” the accounts as alleged in the CZI paper.

“The foreign exchange auction system remains in place and will not be suspended as doing so will cause shortages of goods in the market and abet inflation,” Mangudya said.

“Government and the Bank are committed to an orderly de-dollarisation process and hence it is false that a mono-currency system is now in place.”