Reserve Bank of Zimbabwe (RBZ) governor John Magudya said that the Central Bank would use part of US$961 million it got from the International Monetary Fund (IMF) to stabilise the Zimbabwe dollar.
The local unit has plunged in the past few weeks, with the official exchange rate now at US$1:ZWL$98, from US$1:ZWL$83 two weeks ago.
On the parallel market, the local currency is trading at ZWL$185 to the greenback from ZWL$130:US$1 two weeks ago.
Mangudya told Business Times in an interview that US$500 million from the Special Drawing Rights (SDRs) has been set aside to shore up the local currency. He said:
As we have said before, the majority of the money [US$500m] will help to increase the foreign exchange reserves position and buttress the stability of our domestic currency.
The balance will be for COVID-19 response and support the social sectors such as health, education and the vulnerable groups together with the productive sectors that include industry, agriculture and mining.
But over and above everything the fund will support our domestic currency and macro-economic stability.