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Govt Plans Additional Measures To Preserve Depreciating Zimbabwe Dollar

1 year agoMon, 29 May 2023 09:47:51 GMT
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Govt Plans Additional Measures To Preserve Depreciating Zimbabwe Dollar

The Zimbabwean government has indicated that it planning additional measures to preserve the Zimbabwe dollar which has been rapidly devaluing against the US dollar, prompting widespread consumer outcry and sparking some service providers and business operators to demand payment in foreign currency only.

Finance and Economic Development Minister, Professor Mthuli Ncube, told the media that measures are being implemented to protect and preserve the Zimbabwean dollar, slow down the skyrocketing prices and reduce negative impacts that are eroding the currency’s value.

The erosion of the Zimbabwe dollar, allegedly by economic saboteurs, triggered the recent wave of price hikes.

Speaking to journalists after his tour of retail shops and interaction with the public in Bulawayo on Saturday, the minister said:

The Zimbabwe dollar is our lawful currency, our domestic currency, it is here to stay. It is what has given all these companies the competitiveness. That is why we have 80 percent of the goods being locally produced. This was not the case when the US dollar was the only currency that was circulating.

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Now we have this currency which has led to a kind of boom in the domestic economy and improved competitiveness and this is all due to the presence of the Zimbabwean dollar. We need it, we need to preserve it and protect it as Government. If we stop using the local currency, it will lead to some companies closing down. Some companies were able to reopen and invest because we introduced the Zim dollar.

Surely we will be announcing measures which I cannot mention at the moment this coming week to ensure that we strengthen the domestic currency and reduce the negative impacts that are eroding value for our currency.

According to Finance and Economic Development Minister, Professor Mthuli Ncube, there have been no changes in the economic fundamentals to justify the recent doubling of prices of goods. He accused some business operators of taking advantage of consumers’ misery, saying that the government’s desire is to stabilize prices.

He also revealed that six companies involved in the supply chain of basic commodities would be blacklisted for their role in fueling price hikes, along with middlemen who are part of the problem. The minister warned that any shop behaving badly would have its license withdrawn.

The government is considering raising interest rates again, although there are concerns about the potential increase in non-performing loans, which banks are likely to highlight.

Meanwhile, the Reserve Bank of Zimbabwe’s Financial Intelligence Unit has taken action against companies that refuse to use the local currency and those trading using parallel market rates, freezing the accounts of four major distributors.

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