Zimbabwe’s state-run Sunday mail reported that Zimbabwe has sufficient foreign currency reserves to sustain the reintroduced foreign currency auction system, citing the Central Bank Governor, John Mangudya.
According to the governor, local lenders have almost $1 billion in their Foreign Currency Accounts (FCA).
“It’s about sufficient resources utilization of resources,” Mangudya was quoted as saying in the Harare-based newspaper.
“The first thing is that we do not expect the exchange rate to continue to go up because there is now a formal market of foreign exchange,” he said.
Zimbabwe reintroduced the foreign currency system on June 23, the first time in 16 years, in a bid to curb the local currency rout that was introduced a year ago.
“Just to put things into perspective, the interbank sysytem which we tried earlier in the year failed because the banks could not trade among themselves due to counter party limits, as well as issue of de-risking,” he said.
“The exchange rate will be driven by effective demand from corporates,” he said.
He added that he expects “the exchange rate to stabilize at a level which allows users of foreign exchange to price their goods and services appropriately while at the same time providing good value for money for exporters.”
Every month, Zimbabwe exports $350 million to $400 million and receives $50 million to $60 million as remittances from abroad.