The RBZ will continue to intervene in the market to augment the willing-buyer willing-seller market so as to ensure that all bona fide forex requirements are met. Last week we intervened to the tune of US$50 million but only US$34 million was bought.

However, captains of industry interviewed by Business Weekly said the central bank is not doing enough to facilitate the smooth operation of the foreign currency market.

Kurai Matsheza, the former president of the Confederation of Zimbabwe Industries (CZI), said that while there may be multiple reasons for the low uptake, industry has various demands that require access to foreign currency. Said Matsheza:

The money was released and available to our members, but what we are sure of is that the pipeline demand for foreign currency is much more than the figure that is being said. So it might be an issue of other measures of control by the Bank that has reduced demand.

He suggested that one reason for the reduced uptake of foreign currency is the policy stating that a company cannot bid for foreign currency if it has existing nostro balances.

Matsheza confirmed that any company with foreign currency in its accounts is automatically disqualified from submitting a bid. He said:

Yes, the meeting was held, and recommendations were made that the measure should be removed as companies hold foreign currency for different reasons.

It might be for obligations that are to be settled in a week or 10 days’ time and for some, it can be for capital expenditure which is budgeted for.

Matsheza said stakeholders told the RBZ that members do not go to the market without a genuine cause.

Tapiwa Karoro, the president of the Zimbabwe National Chamber of Commerce (ZNCC), said:

The US$50 million injection means that the RBZ is willing to keep the market well-oiled and our members have not yet said anything about being prevented from accessing the money on the market.

So, we should not speculate why the market uptake was not equal to the injection, because we cannot know the exact demand in a week.

Industrialist Sean Muzangwa stated that although the recent forex injections by the RBZ have been beneficial, additional support is necessary to rebuild industrial confidence. Said Muzangwa:

The RBZ’s actions are commendable, but what we need now is policy consistency. If businesses are to plan, they must be confident that the rules of the game will not change unexpectedly. Only then can we expect sustained growth and a stable currency.

Industries are struggling with delays in accessing foreign currency, which affects production timelines.

The RBZ must streamline its processes and reduce bureaucratic hurdles to ensure that the economy runs smoothly.

A responsive, agile system is critical to restoring confidence and keeping industries productive.

Economist Gladys Shumbambiri-Mutsopotsi contended that although the RBZ’s intervention has offered temporary relief, the overall effect on the economy will hinge on implementing structural reforms. She said:

Stabilising the exchange rate without addressing underlying issues like inflationary pressures and market confidence, is a short-term solution.

To ensure long-term stability, we need deeper fiscal discipline and enhanced transparency in the forex market…

The key issue right now is communication. The RBZ must clearly outline its long-term plan for the currency market.

Without a clear roadmap, market participants will remain cautious, and this will continue to hinder the efficient allocation of foreign currency.

More: Pindula News