By Melisa Munzvandi
RESERVE Bank of Zimbabwe (RBZ) Governor Dr. John Mushayavanhu insists the nation’s foreign exchange market is fulfilling its mandate, driven strictly by standard supply and demand rather than central state allocations.
Mushayavanhu said this while addressing the interbank trading framework.
“The exchange rate on the willing buyer, willing seller foreign exchange market is determined by market forces, while financial institutions are helping facilitate foreign currency transactions and cross border trade,” he said.
Endorsing this position, the RBZ Monetary Policy Committee (MPC) affirmed in a recent policy declaration that trading flexibility remains central to broader stability.
“Greater exchange rate flexibility in the foreign exchange interbank market, anchored by tight monetary conditions, has supported the current stability. Specifically, strategic foreign exchange interventions by the Reserve Bank have helped clear the market and enabled the smooth flow of foreign exchange to the market.”
Central bank figures indicate that robust export earnings and diaspora remittances continue to generate a foreign currency surplus, comfortably exceeding external trade obligations.
This steady inflow has boosted national reserves to levels covering nearly two months of imports, offering a strong cushion for the local currency.
Under the willing buyer, willing seller mechanism, the official exchange rate has stabilized against the United States dollar, curbing activity on the informal parallel market.
Monetary authorities maintain that direct bank interventions remain limited to clearing short term commercial backlogs rather than setting currency values.
To further boost transparency, the central bank plans to launch a digitized trading platform across commercial banks later this year. While independent economic analysts stress that strict fiscal discipline remains crucial for lasting market confidence, official metrics point to an increasingly self-sustaining financial framework that continues to anchor inflation.
Ultimately, the central bank’s pivot from direct market controller to primary supervisor makes policy consistency and public trust vital for long-term success.
Provided commercial banks continue to meet buyer demand and reserve buffers hold steady, this shift marks a pivotal step toward permanent macroeconomic stability.