A man counts bond notes at a vegetable market in Harare. File picture: Philimon Bulawayo/Reuters

INTERNATIONAL –  Zimbabwe’s central bank has sold up to $20 million to banks for trading on the newly launched forex interbank market, but the money could be exhausted by the end of next week due to high demand for dollars, banking sources said on Wednesday.

The central bank sold what it called “seed” US dollars to a handful of banks on Friday, but Reserve Bank of Zimbabwe (RBZ) governor John Mangudya and Finance Minister Mthuli Ncube have refused to say the amount.

“They sold between $15 and $20 million to the banks,” said one executive whose bank bought dollars from the RBZ.

Just recently, foreign funders had said that they were pulling out of Zimbabwe as international companies limit funding for their local operations in a country that is battling foreign exchange shortages.

Africa Guarantee Fund – designed and funded by the African Development Bank in partnership with Danish and Spanish investors – has withdrawn its investment as the guarantor of investment notes issued by Zimbabwe’s Untu Capital. 

Zimbabwe has been facing worsening foreign currency shortages over the past few years and this has crippled imports of key supplies such as fuel, medicines and raw materials for companies.

REUTERS, BUSINESS REPORT