Govt To Continue Drip-feeding New Notes Into The Economy

3 years ago
Tue, 17 Dec 2019 12:10:57 GMT
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Govt To Continue Drip-feeding New Notes Into The Economy

Finance Minister Mthuli Ncube told Senators on Thursday last week that cash will continue to be released into the market in dribs and drabs to avoid sparking inflation.

Ncube revealed this while responding to a question by Masvingo Senator Tichinani Mavetera (MDC Alliance) on what measures Treasury had put in place to deal with businesses demanding payment in foreign currency. He said:

If we put in all the cash that is needed in one moment, it will increase inflation sharply, but also, it may impact the exchange rate and even cause more inflation and so we are using a strategy called a swap, where we are swapping RTGS [real time gross settlement] balances for cash with the bank.

Ncube also revealed that authorities intend to inject about $1 billion into the economy over time to make cash readily available.

The Finance Bill will be brought before Parliamentarians and will have provisions and amendments of the RBZ Act to give more powers to the Reserve Bank of Zimbabwe (RBZ), said Ncube.

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