RBZ dismisses CZI claims

THE Reserve Bank of Zimbabwe (RBZ) has dismissed calls by the Confederation of Zimbabwe Industries (CZI) for the suspension of the official foreign exchange auction system and scoffed at claims that the central bank was raiding foreign currency accounts for businesses.

The auction system, which started in June 2020 as part of measures to stabilise the exchange rates and improve businesses’ access to forex, has seen RBZ allocating close to US$3 billion to firms.

The forex auction is conducted on Tuesdays and businesses share more than US$30 million weekly.
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In a statement, central bank governor, Dr John Mangudya said RBZ will not suspend the auction system and stated that the allegations being raised by CZI were not true.

“On April 22, the Confederation of Zimbabwe Industries (CZI) issued a paper, which it styled as an urgent engagement paper on the currency situation in the country.

“In that paper, CZI called for, inter alia, the suspension of the foreign exchange auction system and alleged that a mono-currency system was in place and also made unfounded references to ‘raiding’ of foreign currency accounts and a bank run,” reads the statement that was published over the weekend.

The RBZ said the public should be aware of the fact that the contents of the CZI paper were a response to ‘rumours’ and not based on facts on the ground.
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“The contents of the said CZI paper and the impressions depicted therein are unfortunate and uncalled for as they have the potential of destabilising financial markets and economic stability of the country,” said Dr Mangudya.

For clarity and avoidance of doubt, Dr Mangudya has advised members of the public that the Government and the RBZ are committed to an orderly de-dollarisation process.

He also said there was no mono-currency system put in place as claimed by the industry body and assured all depositors that their foreign currency accounts were safe.

“The foreign exchange auction system remains in place and will not be suspended as doing so will
cause shortages of goods in the market and abet inflation,” said Dr Mangudya.

“All foreign exchange accounts are safe and the Bank has no reason or appetite to “raid” the accounts as alleged in the CZI paper.”

Dr Mangudya said the bank has also noted with concern that CZI published their paper without engaging the bank to establish the accuracy of the rumours that motivated the paper.

“CZI has created a negative impression that has the effect of stocking market confusion and inflation. The Bank is always at the disposal of stakeholders, including CZI, for discussion and dialogue with a view to fostering interests of industry and the economy and avoid causing market instability,” reads the statement.-The Chronicle