By Godfrey Marawanyika
Zimbabwe collected US$215 million from exporters in the first quarter after ordering them to surrender almost a third of the foreign currency they earn to the central bank in exchange for ZiG to improve liquidity on the interbank market.
The central bank in February reduced the foreign currency retention level for exporters to 70% from 75%. The move was part of sweeping measures to stabilize the nation’s new gold-backed currency, the ZiG. The ZiG has lost almost half of its value against the greenback since it started trading on April 8, 2024 and almost 4% this year.
Most of the foreign currency will be used for government obligations and to meet uncovered demand on the interbank market, with a small portion being used to build the nation’s reserves to back the ZiG, said Governor John Mushayavanhu.
Gold and foreign-exchange reserves stood at US$629 million at March 31, compared with US$276 million at the end of April 2024. Mushayavanhu said he was optimistic that the export proceeds could increase further this quarter.
“The Reserve Bank expects to collect more foreign currency,” as “exports increase during the second quarter with the opening of the tobacco marketing season, and in line with the new export surrender requirement of 30%,” he said.
Tobacco is the country’s biggest agriculture export and the third-largest foreign-exchange earner after gold and platinum. Still, with US President Donald Trump’s so-called reciprocal tariffs now in place across the globe, Zimbabwe’s exports may take a knock.
The governor also said that the central bank had received gold royalties of 106.3 kilograms during the first quarter, an 8.5% increase compared with the same period last year. Other in-kind royalties were US$11 million, he said. Since October 2022, Zimbabwe has required mining entities to pay half their royalties in the form of commodities to the central bank and the rest in cash.
Bloomberg
