By Own Correspondent| Deputy Governor of the Reserve Bank of Zimbabwe Jesimen Chipika has revealed that Zimbabwe requires a foreign currency cover of US$1 billion, against current reserves of US$200 million emphasising the need for increased production to narrow the gap.

Chipika told delegates attending the Confederation of Zimbabwe Industries conference in Bulawayo last week that boosting exports will help the country out of the current situation.

Said Chipika:

“We are looking at US$1 billion foreign currency cover but we only have $200 million.”

Zimbabwe wiped out the hyperinflation figures in 2009 when it abandoned use of the Zimbabwe dollar for a basket of foreign currencies, but mostly dominated by the US dollar.

Over the past two years, the economy has been facing serious foreign currency shortages, with the foreign payments backlog ballooning to over US$700 million last month. Foreign currency shortages are partly resulting from subdued exports.

The central bank has been arranging lines of credit to ease the shortages, but this has had marginal impact as demand for hard currency has continued increasing as production increases.

Measures such as the introduction of the Statutory Instrument 64 of 2016, which restricted imports of goods that could be manufactured locally, triggered revival of the industry. SI 64 of 2016 was then consolidated with various import licensing regulations under Statutory Instrument 122 of 2017.- StateMedia