President Emmerson Mnangagwa will retain John Mangudya for a second term as governor of the Reserve Bank of Zimbabwe, a state-owned newspaper reported on Thursday.

The announcement follows speculation this week that the bank chief, who was first appointed for a five-year term in May 2014, would lose his job in the face of a worsening dollar crunch.

But the president's spokesman George Charamba told the Herald newspaper that Mnangagwa would keep Mangudya in his job.

"The President is very clear on the Reserve Bank Governor's tenure and his performance. Not only is he there to stay but the President is about to renew his contract for a second tenure," Charamba was quoted as saying.

Charamba declined to comment further when contacted on Thursday.

Two years ago, after the country was rocked by hyperinflation during the rule of former president Robert Mugabe, Mangudya introduced the surrogate "bond note" currency, supposedly pegged to the U.S. dollar.

Dollar shortages have caused prices of basic goods, taxis and medicines to rise in recent weeks.

The central bank chief has defended the use of bond notes, which have lost value against the dollar on the black market. He says a government budget deficit of 11.1 percent of GDP and a high import bill are the main causes of the U.S. dollar shortages.