IMF Urges RBZ To Liberalise The Exchange Rate

9 months ago
Fri, 16 Dec 2022 08:54:16 GMT
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IMF Urges RBZ To Liberalise The Exchange Rate

The International Monetary Fund (IMF) has urged the Reserve Bank of Zimbabwe (RBZ) to liberalise the exchange rate, NewsDay reported citing a statement by the Breton Woods institution.

The IMF delegation led by Dhaneshwar Ghura made the recommendation following a 15-day visit to Zimbabwe. Read the statement:

A near-term policy imperative is to sustainably anchor macro-economic stability. In this context, fund staff recommends accelerating the liberalisation of the forex market, including through the removal of restrictions on the exchange rate at which banks, authorised dealers and businesses transact

This can be achieved by mobilising additional revenues, based on tax policy reforms, and by scaling back non-priority outlays, while strengthening public finance management. The financial oversight of the SOEs [State owned enterprises] by Treasury should be further strengthened in order to minimise fiscal risks.

International re-engagement remains critical for debt resolution and access to external financial support.

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RBZ established the forex auction in June 2020 to cater for the foreign currency needs of businesses.

Local economists have always been advising the government through the RBZ to stop quasi-fiscal activities, liberalise the exchange rate, wind down gold coins and restore macroeconomic stability. 

The central bank has been controlling and regulating the foreign currency exchange rate accusing players on the black market of fueling the collapse of the Zimbabwe dollar.

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