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ZimDollar future bright, says Mthuli Ncube

by Staff Reporter
25 Jul 2020 at 08:32hrs | Views
FINANCE and Economic Development Minister Professor Mthuli Ncube yesterday reiterated that there was no going back on the use of the Zimbabwe dollar, adding that the future of the local currency was "bright".

The country adopted a multi-currency system in February 2009 to tame inflation which had reached unprecedented levels and Zimbabwe reintroduced the Zimbabwe dollar in June last year.

Responding to questions during a meeting with Bulawayo businesspeople at the Zimbabwe International Exhibition Centre yesterday, Prof Ncube said people should remember that the country allowed the use of the United States dollar, a few months ago to address the challenges of currency volatility induced by Covid-19 pandemic.

"The future of the Zim dollar is bright, you are abusing it, we will use it. And as Government and together with you the private sector, I believe we're on the right track," he said.

Some uncouth business elements have been fuelling parallel market activities to weaken the Zimbabwe dollar.

Prof Ncube said despite efforts by the saboteurs to destroy the economy, Government will continue implementing measures aimed at promoting economic growth and development.

"Fiscal discipline is critical as an ingredient for macro stability because once you have a deficit, you have to monetise it through money supply growth and that again we will weaken the currency," he said.

Last month, Government as part of measures to promote currency stability introduced the weekly Foreign currency Auction Trading System replacing the fixed exchange rate of US$1:ZWL$25.

The private sector including the Bankers Association of Zimbabwe has rallied behind the weekly forex auction trading initiative saying it has brought stability to the exchange rate while promoting price discovery in the market.

The coming on board of the forex auction trading system saw the exchange rate on the initial auction settling at US$1:57,3 and this week it was pegged at US$1:72,14.

Under the Foreign Currency Auction System, bidders are required to submit one bid per auction, and if more than one bid is submitted all their bids would be rejected.

The bids, which are being submitted through authorised dealers, defined as banks come from individuals, firms and public enterprises.

Source - Chronicle