NEW: RBZ adjusts ZiG rate to promote stability

Business Reporter

Following weeks of rising open market rates and market pressures, the Reserve Bank of Zimbabwe (RBZ) has adjusted the Zimbabwe Gold (ZiG) exchange rate by 42,55 percent against the US dollar.

In a statement issued to banks and bureau de change today seen by The Herald Finance & Business, the central bank announced the new exchange rate of ZiG 24,3902 per US dollar.

This marks the first official adjustment of the ZiG since its introduction.

This is expected to reduce pressure on the domestic market and help stabilise the currency and prices.

The development will reduce the liquidity available in the market to chase the limited supply of US dollars in a development expected to help anchor the exchange rate.

Before the adjustment, the currency traded between ZiG13,6 and 14 per US dollar since the new currency was launched in April this year.

Despite the intervention, the new official rate is still 23,78 percent lower than the black market rate, which has surged to around ZiG32 per dollar, with some traders demanding even higher premiums based on demand and supply dynamics.

This follows RBZ’s recent efforts to stabilise the currency and calls from industry for authorities to further liberalise the exchange rate regime and allow market forces to determine the price.

In September 2024, the central bank injected US$64 million into the interbank market in a bid to curb further depreciation.

Governor Dr John Mushayavanhu confirmed that US$24 million was injected in the first two weeks of September, followed by an additional US$40 million on September 19.

Despite these efforts, the parallel market continues to exert pressure, with rates far exceeding the official exchange rate.

“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,” said Dr Mushayavanhu.

He added that by mid-September, the bank sold an additional US$40 million into the market, resulting in a total injection of US$64 million for the month.

This currency instability highlights the challenges the RBZ faces as it attempts to manage the growing demand for foreign currency while keeping the official exchange rate in line with market realities.