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RBZ assures forex access amid shift to ZiG payments
6 hrs ago |
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The Reserve Bank of Zimbabwe (RBZ) has assured businesses that foreign currency will remain accessible despite a new government directive requiring all contractors and suppliers to be paid exclusively in the Zimbabwe Gold (ZiG) currency.
The move follows Treasury's introduction of a National Standard Pricing List for goods and services procured by ministries, departments and agencies, alongside a policy mandating payments in ZiG. Authorities say the measure is aimed at promoting local currency usage and curbing parallel market activity.
RBZ Governor John Mushayavanhu welcomed the policy, describing it as a key step toward strengthening the domestic currency.
"Providers of goods and services to the public sector that will receive payment in ZiG will have access to foreign currency on the willing-buyer, willing-seller interbank foreign exchange market for their bona fide import requirements," he said.
Mushayavanhu said Zimbabwe's foreign currency position remains strong, supported by external receipts of about US$16 billion in 2025, enabling the central bank to meet legitimate demand for forex.
He added that the policy does not signal an end to the country's multi-currency system, but rather a gradual shift toward increased reliance on the local unit.
However, economists have raised concerns over potential unintended consequences, particularly for suppliers reliant on imported inputs.
Economist Vince Musewe warned that paying suppliers in ZiG could drive them back to the parallel market in search of US dollars.
"The payment in ZiG presents a huge problem if you need to import materials to supply the government. The parallel market is back as suppliers will look for USD elsewhere," he said.
Musewe added that while the National Standard Pricing List could help curb overpricing, its effectiveness would depend on how accurately it reflects prevailing market conditions.
"Suppliers will simply begin to reject government business and that's another problem," he said. "This policy will create another self-manufactured currency crisis because its effects have not been thought through once more."
Another economist, Chenayimoyo Mutambasere, echoed the concerns, warning of risks to supply chains and pricing stability.
"Suppliers who rely on imported inputs may struggle if they are paid in ZiG without reliable access to foreign currency, leading to inflated prices, reduced participation or low-quality goods and services," she said.
She also cautioned that increased ZiG liquidity could heighten exchange rate volatility if recipients rush to convert funds into US dollars.
"Ultimately, without strong policy credibility and consistent macroeconomic management, this measure may boost liquidity, but fail to deliver stability," Mutambasere said.
The policy marks a significant shift in government procurement practices, with its success likely to hinge on the availability of foreign currency and broader confidence in Zimbabwe's monetary framework.
The move follows Treasury's introduction of a National Standard Pricing List for goods and services procured by ministries, departments and agencies, alongside a policy mandating payments in ZiG. Authorities say the measure is aimed at promoting local currency usage and curbing parallel market activity.
RBZ Governor John Mushayavanhu welcomed the policy, describing it as a key step toward strengthening the domestic currency.
"Providers of goods and services to the public sector that will receive payment in ZiG will have access to foreign currency on the willing-buyer, willing-seller interbank foreign exchange market for their bona fide import requirements," he said.
Mushayavanhu said Zimbabwe's foreign currency position remains strong, supported by external receipts of about US$16 billion in 2025, enabling the central bank to meet legitimate demand for forex.
He added that the policy does not signal an end to the country's multi-currency system, but rather a gradual shift toward increased reliance on the local unit.
However, economists have raised concerns over potential unintended consequences, particularly for suppliers reliant on imported inputs.
Economist Vince Musewe warned that paying suppliers in ZiG could drive them back to the parallel market in search of US dollars.
"The payment in ZiG presents a huge problem if you need to import materials to supply the government. The parallel market is back as suppliers will look for USD elsewhere," he said.
Musewe added that while the National Standard Pricing List could help curb overpricing, its effectiveness would depend on how accurately it reflects prevailing market conditions.
"Suppliers will simply begin to reject government business and that's another problem," he said. "This policy will create another self-manufactured currency crisis because its effects have not been thought through once more."
Another economist, Chenayimoyo Mutambasere, echoed the concerns, warning of risks to supply chains and pricing stability.
"Suppliers who rely on imported inputs may struggle if they are paid in ZiG without reliable access to foreign currency, leading to inflated prices, reduced participation or low-quality goods and services," she said.
She also cautioned that increased ZiG liquidity could heighten exchange rate volatility if recipients rush to convert funds into US dollars.
"Ultimately, without strong policy credibility and consistent macroeconomic management, this measure may boost liquidity, but fail to deliver stability," Mutambasere said.
The policy marks a significant shift in government procurement practices, with its success likely to hinge on the availability of foreign currency and broader confidence in Zimbabwe's monetary framework.
Source - newsday
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