HARARE – Reserve Bank of Zimbabwe (RBZ) governor John Mangudya has said the depreciation of local currency in recent months has been caused by companies pursuing selfish business models through excessive currency manipulation.
Shortages of foreign currency in the official market have fuelled a thriving black market where prices are skyrocketing, leading to soaring prices and high inflation in Zimbabwe.
Mangudya said the problem was not as a result of a shortage of US dollars, as the country generates currency at a much higher rate than before.
“The arbitrage business models pursued by some companies are not good for the economy, their selfish business models are unsustainable, they are inflationary, they penalize consumers, they erode business confidence and are counterproductive,” Mangudya said.
He was speaking to Chamber of Mines delegates at Zimbabwe’s Annual Mining Conference in Victoria Falls.
Mangudya revealed that the domestic currency liquidity in the economy, currently over $2.4 trillion, is sufficient to stabilize the domestic currency and support production.
“The confidence-building measures taken by the government will help address negative sentiment patterns affecting economic momentum.
“The country generates enough foreign currency against $7 billion in foreign payments with $9.7 billion received in 2021.
“Foreign income for 2021 is the highest since then. The country received US$4.1 billion in foreign currency as of May 15, 2022, an increase of about 40.5% from the same period last year of US$2.8 billion,” he said.
Zimbabwe’s inflation rate rose to 131% last month from 96% in May, among the highest in the world.
