• Login
NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
No Result
View All Result
No Result
View All Result
NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
No Result
View All Result
Home Business

Zimbabwe Currency Shock Is Central Banker’s First Taste of Chaos

10 months ago
in Business, Features, highlights, Home, home-news, latest News
2 min read
0 0
0
59
VIEWS
Share on FacebookShare on TwitterShare on Linkedin

Zimbabwe Currency Shock Is Central Banker’s First Taste of Chaos

Zimbabwe’s latest attempt to introduce a new currency is coming undone, just five months after initially being praised for taming an inflation spiral and exchange-rate volatility.

Central bank Governor John Mushayavanhu is being left to deal with the fallout in a nation which has faced multiple currency crises before. It is the veteran banker’s first reckoning of the market upheaval that was all too familiar among his predecessors.

Since Aug. 28 the ZiG, short for Zimbabwe Gold, has lost value against the US dollar for 20 straight trading days. It sells for 26 per dollar on the parallel market, a 50% discount to the official rate, stoking price distortions in the economy.

The governor is having to deal with the reality that without fixing the underlying factors plaguing the ZiG, there’s limited hope for the new currency, said Lyle Begbie, an economist at Oxford Economics.

They include current account and fiscal pressures that have worsened due to an increase in food imports because of an El Niño-induced drought and lower commodity prices, which have led to reduced dollar inflows into the mineral-rich nation, and the lack of access to international capital markets.

“Without sufficient foreign reserves, export growth, or sustained capital inflow the creation of a new currency does not simply magic up stability,” said Hasnain Malik, emerging market equity strategist at Tellimer in Dubai.“The most recent bout of pressure should not be a surprise.”

RelatedPosts

CID Establishes Task Force to Combat Influx of Stolen Vehicles into Ghana

Government Reintroduces Free Cocoa Fertiliser Programme to Boost Sector Growth

President Mahama Directs Ministers to Fast-Track Rollout of Ghana’s E-Visa System

Added to those pressures any Zimbabwean central bank governor will always have “limited credibility to start with” and regaining confidence will take time after “numerous failed monetary experiments,” Begbie said.

The nation’s previous currency the Zimbabwean dollar lost value against the US currency every day this year and depreciated 80% before it was abandoned. The cash-strapped government also resorted to printing more of the local unit to fund the budget contributing to its weakness.

Temporary Shock

Still, Mushayavanhu is hopeful the latest currency turmoil will be short-lived.

In recent post on X the central bank called it a “temporary shock.” The comment was followed by an opinion piece published in state media on Sept. 22, in which the governor blamed the currency issues on “supply and demand mismatches caused by timing differences in the realization of foreign-exchange inflows and outflows.”

He also said the central bank, which has injected $64 million so far this month into the foreign exchange market, is considering other measures to support the local unit. They include a tight monetary policy and using the country’s reserves if there are severe market disruptions that threaten economic stability. The central bank is set to announce its latest rate decision later this week.

The Bankers Association of Zimbabwe is also working with the central bank to improve the situation. Lenders’ plan to be “more consistent in supplying the interbank market with enough forex to meet bona-fide invoices going forward,” the lobby’s President Lawrence Nyazema said.

The $64 million released by the central bank has covered most transactions that were in the pipeline, Nyazema said. “This should ensure the provision of goods and services in ZiG at reasonable prices hence improving confidence in the currency.”

Source: bloomberg
Via: norvanreports
Tags: Zimbabwe Currency Shock Is Central Banker’s First Taste of Chaos

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

I agree to the Terms & Conditions and Privacy Policy.

No Result
View All Result

Highlights

AngloGold Ashanti Doubles Earnings and Free Cash Flow on Higher Gold Prices, Production Surge in Q2 2025

Africa’s Richest Country to Boost Continental Trade Ties After U.S. 30% Tariff Hit

Nigeria Hits Panic Button as West Africa Logs $2.1bn in Suspicious Crypto Transactions

CID Recovers 43 Stolen Luxury Vehicles Smuggled into Ghana

2025 Mid-Year Economic Review: Fiscal Discipline is a Necessary Pain

Ledecky’s Heroics Highlight Underwhelming US Campaign at World Aquatics Championships

Trending

Business

CID Establishes Task Force to Combat Influx of Stolen Vehicles into Ghana

August 4, 2025

CID Establishes Task Force to Combat Influx of Stolen Vehicles into Ghana The Criminal Investigations Department (CID)...

Government Reintroduces Free Cocoa Fertiliser Programme to Boost Sector Growth

August 4, 2025

President Mahama Directs Ministers to Fast-Track Rollout of Ghana’s E-Visa System

August 4, 2025

AngloGold Ashanti Doubles Earnings and Free Cash Flow on Higher Gold Prices, Production Surge in Q2 2025

August 4, 2025

Africa’s Richest Country to Boost Continental Trade Ties After U.S. 30% Tariff Hit

August 4, 2025

Who we are?

NORVANREPORTS.COM |  Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World

NorvanReports is a unique data, business, and financial portal aimed at providing accurate, impartial reporting of business news on Ghana, Africa, and around the world from a truly independent reporting and analysis point of view.

© 2020 Norvanreports – credible news platform.
L: Hse #4 3rd Okle Link, Baatsonaa – Accra-Ghana T:+233-(0)26 451 1013 E: news@norvanreports.com info@norvanreports.com
All rights reserved we display professionalism at all stages of publications

No Result
View All Result

Welcome Back!

Login to your account below

Forgotten Password?

Create New Account!

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
NORVANREPORTS.COM | Business News, Insurance, Taxation, Oil & Gas, Maritime News, Ghana, Africa, World
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.