In a decisive move to combat currency manipulation and restore economic stability, President Emmerson Mnangagwa has issued a stern warning to those engaging in parallel market activities. This announcement, made during yesterday’s State of the Nation Address, comes as the government responds to a resurgence of speculative behavior that threatens to disrupt the economy. Emphasizing the critical need for currency stabilization, President Mnangagwa highlighted that such measures are vital for achieving macro-economic stability.
To tackle these challenges, the government introduced the Zimbabwe Gold (ZiG) in April 2024, a currency anchored by gold and USD reserves designed to promote economic growth and stability. The President called on all Zimbabweans to cooperate with these new measures, stressing the importance of abiding by policies aimed at curbing inflation and maintaining economic order. This appeal reflects the government’s commitment to protecting citizens from economic disruptions while fostering a stable financial environment.
The success of these initiatives relies on collective responsibility, with President Mnangagwa urging national unity in overcoming economic hurdles. By working together, he asserted, Zimbabweans can establish a stable and inclusive economy that benefits all citizens, paving the way for a brighter future.
In response to mounting foreign currency pressures, the Reserve Bank has enhanced flexibility within the foreign exchange market under the willing-buyer willing-seller arrangement. This increased flexibility is anticipated to improve price discovery and encourage participation in the foreign exchange market, further stabilizing the economy.
The government remains dedicated to supporting the currency by allocating 50% of royalties towards building reserves. The introduction of the Zimbabwe Gold (ZiG) has been lauded as a significant step towards monetary reform, as it aims to reduce inflationary pressures, bolster trust in the financial system, and attract foreign investment. Notably, foreign currency inflows from exports have risen from US$7 billion in 2023 to US$8 billion in 2024, indicating positive trends in the economy.
Zimbabwe’s banking sector continues to demonstrate resilience, with adequate capital and liquidity buffers, while maintaining stable profitability, asset quality, and liquidity metrics. The government’s firm stance against currency manipulation sends a strong message to market players that economic sabotage will not be tolerated. By stabilizing the currency, President Mnangagwa’s administration aims to protect the purchasing power of Zimbabweans, ensure price stability, and boost business confidence. This decisive action is expected to particularly benefit vulnerable populations who are most affected by economic instability.
As the President concluded his address, he called for a unified effort to lay a solid foundation for economic prosperity, peaceful development, and freedom from undue external interference, reaffirming the government’s commitment to a stable and prosperous Zimbabwe.
