'Mushayavanhu must assert himself as independent'

Businessman and economist, Nigel Chanakira, says the new Reserve Bank of Zimbabwe governor John Mushayavanhu must assert himself as an independent central banker to stabilise the local currency.

For years, there have been concerns that the central bank was powerless.

This has seen the bank being forced to undertake quasi-fiscal operations.

"Zimbabweans are an injured people. We have lost a lot of value in savings and investments and there is very little trust of the local currency, but he [Mushayavanhu] is new. He has got a new structure of backing [the currency] and will not allow the money supply to escalate beyond the reserves. If he does this, then sure, you know, he stands a good chance," Chanakira told NewsDay on the sidelines of a post 2024 Monetary Policy & Outlook Conference on Tuesday organised by NewsDay's sister paper, Zimbabwe Independent.

"It's a new currency. Like anything new, there's a new governor that comes with a new currency. We have got to give him the benefit of the doubt. He's got his ideas. We know his track record as a banker. He's now got to assert himself as an independent central bank governor. In Zimbabwe, that is a challenge, and he must live up to the challenge."

He said that Mushayavanhu's reputation was on the line.

"To quote him he says, you know, ‘not under my watch'. So, for us we are watching. We want him to build confidence in the market because generally we know belief among Zimbabweans with regards to a new currency is low," Chanakira added.

Critics say the Zimbabwe Gold (ZiG) will succeed if it is used as a medium of exchange to buy fuel or is accepted by the international markets.

"RBZ said this week that the current pricing mechanism in the fuel sector would remain in place. "As Reserve Bank and Government work towards wider use of ZiG, the fuel sector will be encouraged to accept ZiG for fuel purchases," RBZ said, in a statement on Tuesday evening.

"ZiG is a local currency that has just been launched and has not yet achieved convertibility. The bank will work to strengthen the currency to attain full convertibility, consistent with the regional agenda for macroeconomic convergence under the Sadc Protocol on Finance and Investment."

However, the RBZ is optimistic the new currency to restore confidence in the local currency.

"This will go a long way in fostering simplicity, credibility, certainty and predictability in monetary and financial affairs. The structured currency and the accompanying monetary policy measures will bring price and exchange rate stability in the economy," RBZ said.