RBZ pumps US$64m to shore up ZiG

By Business Reporter | Sep. 20, 2024 | 2 Min read

The injection, the second in barely two months after the central bank in July pumped US$50 million into the market to clear the pipeline demand for foreign currency, comes on the back of a sharp depreciation of the local currency, Zimbabwe Gold (ZWG, formerly ZiG), amid indications it has lost more than half of its value within two months, fuelling a sharp increase in prices of goods and services.

THE Reserve Bank of Zimbabwe (RBZ) says it has injected US$64 million into the interbank foreign exchange market to meet growing demand for the greenback amid rising premiums on the alternative market.

The US dollar is trading at ZWG13,9711 on the interbank market and between ZWG26 and ZWG33 on the parallel market.

In a statement yesterday, RBZ governor John Mushayavanhu said the injection came on the back of a build-up in pipeline demand for foreign currency at banks, reflecting transitory foreign currency supply and demand mismatches which had exerted undue pressure on the foreign exchange market.

“Pursuant to smoothening the supply/demand mismatches in August/September 2024, the Reserve Bank has during the first two weeks of September 2024, injected US$24 million into the interbank foreign exchange market,” he said.

“Furthermore, guided by the obtaining pipeline demand at banks as at September 18, 2024, the Reserve Bank has, as of today [September 19] sold into the interbank market an additional US$40 million. This has resulted in a cumulative foreign currency injection totalling US$64 million for the month of September 2024 alone.”

Mushayavanhu said foreign currency receipts had increased by 13,4% from January to August 2024, compared to the same period in 2023.

The increase in foreign currency receipts will ensure continued timely settlement of foreign payments from importers’ foreign currency accounts and the central bank’s weekly foreign currency injections, he said.