The Reserve Bank of Zimbabwe (RBZ) has moved to lock up excess liquidity in Non-Negotiable Certificates of Deposit (NNCDs) as part of its strategy to curb speculative lending and stabilise the exchange rate.

This decision comes despite mounting pressure from industry and commerce.

Dr. John Mushayavanhu, Governor of the RBZ, has stated unequivocally that the central bank will not reverse its decision.

In an exclusive interview with Business Times, a market leader in business, financial and economic reportage, Dr Mushayavanhu emphasised that the release of excess liquidity would be carefully timed to avoid triggering inflationary pressures.

“The Reserve Bank is actively managing liquidity conditions and has locked up excess liquidity in NNCDs to minimise speculative lending and prevent potential risks to price stability and exchange rate fluctuations,” Dr. Mushayavanhu explained.

While acknowledging the concerns of local companies that have not received their hard currency from the auction system, Dr. Mushayavanhu confirmed that businesses would have to wait for the NNCDs to be unlocked or opt for a two-year Zimbabwe Gold (ZiG) instrument, offering an annual interest rate of 7.5%.

Exporters would also be given a one-year ZiG instrument for the 25% of export earnings they are required to surrender to the Ministry of Finance, Economic Development, and Investment Promotion.