Mangudya shunted out early, as currency crisis hits the markets – The Zimbabwe Mail

HARARE – President Mnangagwa has expedited the appointment of Dr John Mushayavanhu as Reserve Bank of Zimbabwe Governor in response to a recent sharp decline in the value of the Zimbabwean dollar, it has been learnt.

Dr Mushayavanhu’s term was originally scheduled to begin in May 2024, following the expiration of Dr John Mangudya’s 10-year tenure in April at the helm of the apex bank.

However, with the local currency experiencing one of its worst depreciations in recent memory and the market anxious about the delayed 2024 Monetary Policy Statement, Dr Mushayavanhu has assumed the central bank’s leadership role much sooner.

The official announcement in a government gazette by Finance, Economic Development and Investment Promotion Minister, Professor Mthuli Ncube, states that President Mnangagwa appointed Dr Mushayavanhu for a five-year term starting March 28, 2024, and ending March 27, 2029.

Dr Mushayavanhu’s immediate challenge is to curb the prolonged currency slump, which has intensified significantly over the past week.

This urgency is compounded by the delay in announcing the 2024 Monetary Policy Statement, a document typically outlining measures to address economic issues.

The gap between the official and black-market exchange rates has widened dramatically. On March 14th, the premium stood at 23.4 percent, significantly higher than February’s levels. As of yesterday, the premium had ballooned to approximately 60 percent, worrying many economic actors.

Officially, the Zimbabwean dollar has lost significant value in 2024: 39 percent in January, 30.8 percent in February and 31.5 percent in March. This translates to a total official depreciation of 72 percent.

A senior government official, speaking on condition of anonymity, attributed the recent currency turmoil to limited US dollar availability in the market.

However, the official downplayed the significance of the black market activity, calling it a “futile exercise.”

“All this run and all will be irrelevant in a couple of days,” the official said cryptically, adding that the market’s behaviour was actually “making our lives more easier and comfortable to deal with the amount of Zimbabwe dollars in circulation.”

Meanwhile, Deputy Finance Minister Kudakwashe Mnangagwa attempted to calm market anxieties through social media post.

On the Ministry’s Twitter handle, he acknowledged inquiries regarding the exchange rate surge and attributed it to pre-Monetary Policy Statement jitters.

The Deputy Minister urged Zimbabweans to hold onto their Zimbabwean dollars and not engage in currency hedging.

He further assured the public that the government was committed to preventing valuen loss through the introduction of currency stabilisation measures.

With Dr Mushayavanhu now in place, details of his proposed solutions are already being discussed publicly.

President Mnangagwa reiterated his previous stance on transitioning to a structured currency system.

He emphasised the distortions created by the mismatch between the Zimbabwean dollar and the US dollar, which fuels inflation.

“But soon Government will introduce new measures to stabilise the currency including linking the exchange rate to hard assets such as gold and creating a currency board,” he said.

In a prior interview with this publication, Dr. Mushayavanhu himself indicated that the forthcoming Monetary Policy Statement would comprehensively address exchange rate and price instability.

The market eagerly awaits its release. – Business Weekly