News / Local
Another plan to rescue Zimdollar
11 Feb 2024 at 16:07hrs | Views
ZIMBABWE is considering overhauling its exchangerate regime as the government seeks new measures to save its beleaguered currency.
The latest proposals will be in a monetary policy statement the Reserve Bank of Zimbabwe and Treasury are jointly working on, according to governor John Mangudya. President Emmerson Mnangagwa last Tuesday signaled a revamp, following the local dollar's decline. A date is yet to be announced for the release of the statement.
Options being studied by working groups from the central bank and Treasury include scrapping a weekly foreign-currency auction started in 2020, shifting the mandatory 25% surrender requirement for exporters to the interbank system rather than the central bank and allowing lenders to set a market-reflective exchange rate, according to two people familiar with the plans.
Everything is on the table at the moment, with the incoming Governor John Mushayavanhu also involved in deliberations, they said, declining to be identified as the talks aren't public.
The unit has slumped more than 40% against the dollar this year after plunging 90% in 2023, making it the world's worst-performing currency over the period.
The depreciation underpins the economic hardships in the southern African nation of around 16 million people and evokes memories of the currency collapse and hyperinflation of the late 2000s sparked by a political and economic crisis.
The Zimbabwe dollar was trading officially at around 11,000 to the greenback on Wednesday, and at 15,600 on the parallel market, according to ZimPriceCheck.com.
A raft of policy measures by the economic clusters will "arrest price increases, stabilise the currency and encourage savings", Mnangagwa said last Tuesday, without providing further details.
Mnangagwa's comments were meant to provide "forward guidance" on the thrust of the policy statement, according to Mangudya.
"It's a great reassurance that the president would like to see durable stability of prices and the exchange rate in the economy," the central bank chief said in response to questions sent by text message. He declined to comment on the proposals being discussed.
The latest proposals will be in a monetary policy statement the Reserve Bank of Zimbabwe and Treasury are jointly working on, according to governor John Mangudya. President Emmerson Mnangagwa last Tuesday signaled a revamp, following the local dollar's decline. A date is yet to be announced for the release of the statement.
Options being studied by working groups from the central bank and Treasury include scrapping a weekly foreign-currency auction started in 2020, shifting the mandatory 25% surrender requirement for exporters to the interbank system rather than the central bank and allowing lenders to set a market-reflective exchange rate, according to two people familiar with the plans.
Everything is on the table at the moment, with the incoming Governor John Mushayavanhu also involved in deliberations, they said, declining to be identified as the talks aren't public.
The unit has slumped more than 40% against the dollar this year after plunging 90% in 2023, making it the world's worst-performing currency over the period.
The Zimbabwe dollar was trading officially at around 11,000 to the greenback on Wednesday, and at 15,600 on the parallel market, according to ZimPriceCheck.com.
A raft of policy measures by the economic clusters will "arrest price increases, stabilise the currency and encourage savings", Mnangagwa said last Tuesday, without providing further details.
Mnangagwa's comments were meant to provide "forward guidance" on the thrust of the policy statement, according to Mangudya.
"It's a great reassurance that the president would like to see durable stability of prices and the exchange rate in the economy," the central bank chief said in response to questions sent by text message. He declined to comment on the proposals being discussed.
Source - Blooomberg
