Zimbabwe News

John Mushayavanhu vows to destroy the forex black market

Reserve Bank of Zimbabwe (RBZ) Governor John Mushayavanhu said that he will permanently eradicate the foreign currency black market following the introduction of the gold-backed currency, Zimbabwe Gold (ZiG).

Arguably, Zimbabwe’s black market determines the exchange rate, and according to the RBZ’s October 2021 report, the informal market controlled an estimated US$500 million.

Independent estimates say the informal black market now controls over US$2.5 billion, which fuels the parallel market.

Speaking in an interview with the Independent, said businesses that have genuine forex needs should approach their banks to convert their ZiG into foreign currency. He said:

What I can tell you is that the days of illegal money changers are numbered. ZiG is fully convertible. If you have a genuine need for forex.

Let us say you have an invoice to pay in forex, you go to your bank and that forex will be available to you and they debit your ZiG account if you have the money in the account.

The only people who are likely to go to the parallel market are people, who are buying ZiG for illegal purposes, who are buying US dollars for illegal purposes.

But if you have a legal genuine need, there is absolutely no reason why you should go to the parallel market.

The central bank closed the forex auction system, which had struggled to honour allotments and switched to a market-determined exchange rate. Said Mushayavanhu:

The exchange rate determination, going forward under ZiG, is going to be market-determined, just like we have done since January.

But you will find that because there will be a demand for ZiG, ZiG might actually strengthen instead of going the other way.

I am sure you have seen what we put in the monetary policy statement. Come the next QPD (quarterly paid dates) in June, 50% of the QPD dues are going to be paid in ZiG.

There is only US$80 million worth of ZiG in circulation in this market, 50% of QPDs are way in excess of US$80 million. There is going to be a huge demand for ZiG.

I have been saying if I were you, I would start accumulating ZiG now. Because you might find that by the time we get to June, it will be so expensive that you will be losing out.

All I can say to Zimbabweans is that ZiG is the future, ZiG is a stable currency. If you do not get ZiG now, you will be looking for it as early as June this year. Everyone will be hunting for it.

Mushayavanhu also dismissed claims that he owns shares in FBC Holdings, which would have made him ineligible to occupy the post of governor.

Last week Nesbert Munyuki and Valentine Ziko, co-leaders of the Zimbabwe National Students Union (ZINASU), wrote to President Emmerson Mnangagwa demanding that he revoke Mushayavanhu’s appointment, claiming he is a shareholder of FBC Holdings Limited.

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