News / National
Mnangagwa warns forex dealers
03 Oct 2024 at 08:58hrs | Views
In a bold move to stabilize the beleaguered Zimbabwe Gold (ZWG) currency, President Emmerson Mnangagwa announced on Wednesday that 50% of mining royalties will be allocated to bolster the currency's reserves. This declaration came during the State of the Nation Address (SONA) delivered to mark the commencement of the second session of the 10th Parliament, amid growing concerns over the rapid depreciation of the new gold-backed currency, which has plummeted to ZWG30 against the US dollar in parallel markets.
"The government remains committed to backing the currency by setting aside 50% of royalties for building reserves," Mnangagwa stated, highlighting an increase in foreign currency inflows from exports, which rose from US$7 billion in 2023 to US$8 billion in 2024. He emphasized that the banking sector is in a robust position, characterized by adequate capital and liquidity buffers, stable profitability, and sound asset quality.
Despite these positive indicators, the President expressed concern over the resurgence of parallel market activities, attributing them to speculative tendencies. "Corrective measures are being instituted to protect all Zimbabweans from economic disruptions," he warned, directly addressing the activities of parallel market dealers.
Mnangagwa urged parliamentarians to fully support the local currency, stressing its crucial role in achieving macroeconomic stability. He called on all citizens to respect and adhere to measures designed to maintain economic stability and curb inflation.
In his address, the President also referenced recent actions by the Reserve Bank of Zimbabwe, which have introduced greater flexibility within the willing-buyer willing-seller foreign exchange arrangement. These measures are aimed at promoting effective price discovery and encouraging foreign exchange holders to engage more actively in the official market. However, some business community stakeholders have criticized these interventions, suggesting they may complicate an already challenging economic landscape.
"Together, let us lay a solid foundation for economic prosperity, peaceful development, and freedom from undue external interference," Mnangagwa concluded, emphasizing the need for collective efforts in navigating the nation's economic challenges.
"The government remains committed to backing the currency by setting aside 50% of royalties for building reserves," Mnangagwa stated, highlighting an increase in foreign currency inflows from exports, which rose from US$7 billion in 2023 to US$8 billion in 2024. He emphasized that the banking sector is in a robust position, characterized by adequate capital and liquidity buffers, stable profitability, and sound asset quality.
Despite these positive indicators, the President expressed concern over the resurgence of parallel market activities, attributing them to speculative tendencies. "Corrective measures are being instituted to protect all Zimbabweans from economic disruptions," he warned, directly addressing the activities of parallel market dealers.
In his address, the President also referenced recent actions by the Reserve Bank of Zimbabwe, which have introduced greater flexibility within the willing-buyer willing-seller foreign exchange arrangement. These measures are aimed at promoting effective price discovery and encouraging foreign exchange holders to engage more actively in the official market. However, some business community stakeholders have criticized these interventions, suggesting they may complicate an already challenging economic landscape.
"Together, let us lay a solid foundation for economic prosperity, peaceful development, and freedom from undue external interference," Mnangagwa concluded, emphasizing the need for collective efforts in navigating the nation's economic challenges.
Source - NewZimbabwe
