The head of Zimbabwe's central bank, Dr. John Mushayavanhu, recently stressed his team's dedication to making sure the Zimbabwe Gold currency (ZiG) succeeds. Zimbabwe brought out this money last April after fighting with changing exchange rates and high inflation for many years. The bank keeps a tight hold on the money supply and sets high interest rates to stop people from borrowing just to bet on currency changes. The bank boss said they're working hard to keep ZiG stable as the main currency for the country.
Dr. Mushayavanhu shared these thoughts during recent talks with tourism business leaders. He defended the bank's money rules. The top banker emphasized that moving away from the US dollar remains on track to happen by 2030 when they plan to use only Zimbabwe's money. Government officials, business experts, and economists all agree that using US dollars hurts Zimbabwe because that strong currency makes local products cost more when sold abroad.
The limited amount of dollars also prevents the bank from fully controlling the country's money supply. One way they're building trust in ZiG involves letting businesses set prices freely. The market can price their goods at whatever USD to ZiG rate they prefer without sticking to the official RBZ exchange rate. This frees up the pricing system and lets companies use exchange rates that match what's happening in real markets.
He noted that financial authorities won't punish businesses for not using the official exchange rate as long as their profit margins stay reasonable. The banker warned that businesses trying to cheat customers with crazy exchange rates would lose customers to competition. The ZiG to USD rate keeps strengthening, which proves people trust the local money more. His deputy, Dr. Innocent Matshe, believes the real exchange rate based on economic facts should be US$1 equals ZiG22.
Officials expect the market will move toward this level naturally. Despite requests from tourism companies for special treatment regarding foreign money rules, Dr. Mushayavanhu made clear they won't get any breaks. Tourism and hospitality must follow the same rules as everyone else, including the recent rule that exporters must convert 30 percent of their foreign earnings to ZiG. The governor explained that asking for reduced requirements might actually make him speed up plans to phase out dollars completely.
The bank chief sends a strong message to other industries, hoping for special treatment so that nobody will receive exceptions to these foreign currency rules. People have argued about whether ZiG should be used for buying fuel. Some businesses pushed for making ZiG mandatory for fuel sales, but the Governor firmly rejected this idea. He explained that gas stations will naturally start accepting local currency when they're ready.
Dr. Mushayavanhu revealed that some fuel sellers already approached the bank, offering to sell gas for ZiG to pay their local bills. Over time, he believes, fuel businesses will voluntarily sell gas in Zimbabwe's currency. We do not want to go back to long queues and fuel shortages, he emphasized, showing that they'll make decisions based on keeping the economy stable. He also turned down requests for special access to foreign currency for big building projects.
Dr. Mushayavanhu dismissed worries about not having enough US dollars in the market. Local banks have access to foreign lines of credit, he insisted, saying tourism businesses should have no trouble getting these loans. However, tourism industry leaders at the meeting disagreed with him. According to these business people, banks might approve loans in foreign currency, but actually giving out the money remains difficult. The council pointed out that there are long waiting lists at banks.
Dr. Mushayavanhu shared these thoughts during recent talks with tourism business leaders. He defended the bank's money rules. The top banker emphasized that moving away from the US dollar remains on track to happen by 2030 when they plan to use only Zimbabwe's money. Government officials, business experts, and economists all agree that using US dollars hurts Zimbabwe because that strong currency makes local products cost more when sold abroad.
The limited amount of dollars also prevents the bank from fully controlling the country's money supply. One way they're building trust in ZiG involves letting businesses set prices freely. The market can price their goods at whatever USD to ZiG rate they prefer without sticking to the official RBZ exchange rate. This frees up the pricing system and lets companies use exchange rates that match what's happening in real markets.
He noted that financial authorities won't punish businesses for not using the official exchange rate as long as their profit margins stay reasonable. The banker warned that businesses trying to cheat customers with crazy exchange rates would lose customers to competition. The ZiG to USD rate keeps strengthening, which proves people trust the local money more. His deputy, Dr. Innocent Matshe, believes the real exchange rate based on economic facts should be US$1 equals ZiG22.
Officials expect the market will move toward this level naturally. Despite requests from tourism companies for special treatment regarding foreign money rules, Dr. Mushayavanhu made clear they won't get any breaks. Tourism and hospitality must follow the same rules as everyone else, including the recent rule that exporters must convert 30 percent of their foreign earnings to ZiG. The governor explained that asking for reduced requirements might actually make him speed up plans to phase out dollars completely.
The bank chief sends a strong message to other industries, hoping for special treatment so that nobody will receive exceptions to these foreign currency rules. People have argued about whether ZiG should be used for buying fuel. Some businesses pushed for making ZiG mandatory for fuel sales, but the Governor firmly rejected this idea. He explained that gas stations will naturally start accepting local currency when they're ready.
Dr. Mushayavanhu revealed that some fuel sellers already approached the bank, offering to sell gas for ZiG to pay their local bills. Over time, he believes, fuel businesses will voluntarily sell gas in Zimbabwe's currency. We do not want to go back to long queues and fuel shortages, he emphasized, showing that they'll make decisions based on keeping the economy stable. He also turned down requests for special access to foreign currency for big building projects.
Dr. Mushayavanhu dismissed worries about not having enough US dollars in the market. Local banks have access to foreign lines of credit, he insisted, saying tourism businesses should have no trouble getting these loans. However, tourism industry leaders at the meeting disagreed with him. According to these business people, banks might approve loans in foreign currency, but actually giving out the money remains difficult. The council pointed out that there are long waiting lists at banks.
