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Captains of industry and economists say businesses will struggle to recover from the recent Zimbabwe dollar plunge amid revelations that they suffered significant losses.
The local unit depreciated by 273% between May and June 2023.
Speaking to <a href="https://businesstimes.co.zw/zim-dollar-plunge-losses-hit-industry/">Business Times</a>, the Confederation of Zimbabwe Industries (CZI) president Kurai Matsheza, said:
<blockquote>
The businesses in Zimbabwe will need a miracle to recover from the unprecedented losses they suffered heavily during the past two months as most firms are either in debt or operating below capacity which emanated from the loss of value of the local currency.
Companies are still struggling to stock up, hence they will need time to recover if the current stability continues.
</blockquote>
In its latest report, CZI said despite the current stability, companies won’t be able to achieve set targets. It said:
<blockquote>
Economies can hardly survive hyperinflation. Although it (the exchange rate) seems to be under control, the damage has already been done on the annual inflation front, as all the set targets are no longer achievable.
</blockquote>
Economist Gift Mugano told Business Times that the Government should abandon short-term financing to deal with inflation. Said Mugano:
<blockquote>
As long as the government maintains short-term financing, it will certainly backfire in terms of inflation point of view and exchange rate spiral point of view as at one point the authorities will pay contractors and they will come back to the parallel market looking for the greenback.
</blockquote>
Another economist who spoke to the publication on condition of anonymity said:
<blockquote>
The plunge has left businesses on the brink as the balance sheets were eroded by inflation and it will take years to recover, only if stability continues.
</blockquote>
The Zimbabwe dollar has been on the recovery path on the official foreign currency exchange market and has firmed to $4 505 from above $6 000 a few weeks ago.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Pindula News

Industry To "Take Years To Recover" From Zimbabwe Dollar Plunge

The local unit today gained $32.0677 against the United States dollar to average $4 505.4232 at the Reserve Bank of Zimbabwe wholesale foreign currency auction.
This Tuesday, 25 July 2023, 16 bids were received, and all 16 bids were accepted. However, only 6 bids were allotted.
The total value of bids accepted was US$14,471.600.00 and US$7,900,600.00 was allotted.
The amount on offer was US$20 000 000.00.
The highest bid rate was ZWL$4,580.0000 while the lowest bid rate was ZWL$4,480.0000.
Below are the rates from the last six auctions:
<ul>
<li>25 July: $4 505.4232</li>
<li>20 July: $4 537.4909</li>
<li>18 July: $4,771.3854</li>
<li>14 July: $4883.8208</li>
<li>11 July: $4 998.8352</li>
<li>06 July: $5 251.0640</li>
</ul>
<img alt="Image" decoding="async" src="https://pbs.twimg.com/media/F14EGPHXgAAvWxF?format=jpg&amp;name=4096x4096"/>
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Zimbabwe Dollar Official Rate Now $4 505 Per US$1

The Zimbabwe dollar continued firming against the United States Dollar following the latest Reserve Bank of Zimbabwe wholesale foreign currency auction held on Thursday, 20 July.
The Zim dollar is now trading at ZWL$4 537.4909 from ZWL$4 771.3854 per US$1.
This Thursday, 13 bids were received, and all 13 bids were accepted. However, 11 bids were allotted.
The total value of bids accepted was US$6,383,500.00 and US$5,705,700 was allotted.
The amount on offer was US$20 000 000.00.
The highest bid rate was ZWL$4.711.7431 while the lowest bid rate was ZWL$4,537.4909.
Below are the rates from the last five auctions:
<ul>
<li>20 July: $4 537.4909</li>
<li>18 July: $4,771.3854</li>
<li>14 July: $4883.8208</li>
<li>11 July: $4 998.8352</li>
<li>06 July: $5 251.0640</li>
</ul>
<img alt="Image" decoding="async" src="https://pbs.twimg.com/media/F1d5RQ-XwAEywYZ?format=jpg&amp;name=900x900"/>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Zimbabwe Dollar Official Rate Now $4 537 Per US$1

The Zimbabwe dollar has firmed again on the Wholesale Foreign Exchange Auction conducted on Friday, 14 July to ZWL$4883.8208 per US$1.
On Tuesday, 11 July, the weighted average was ZWL$4 998.8352, which was itself a significant recovery from the ZWL$5 251.0640 on 06 July 2023.
Today, 10 bids were received from banks, and all 10 bids were accepted but only 8 bids were allotted.
The RBZ said that the total value of bids accepted was US$5,295,000.00, while US$4,845,000.00 was allotted.
The amount on offer was US$20 000 000.00.
The highest bid rate received was ZWL$5,037.3700 while the lowest bid rate received was ZWL$4,700.0000.
<img alt="Image" decoding="async" src="https://pbs.twimg.com/media/F1AC0pNXoAI6h8A?format=jpg&amp;name=900x900"/>
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Zimbabwe Dollar Official Rate Now ZWL$4 883 Per US$1

The Government has accused several pharmacies and other traders of engaging in “forward pricing” and speculation in violation of exchange control directives as well as standing government policy guidelines with respect to pricing and the use of the Zimbabwe dollar.
In a statement released on Tuesday, 11 July, the Ministry of Finance and Economic Development, said the Financial Intelligence Unit (FIU) is conducting investigations to identify the culprits.
It said (FIU) has established that some pharmacies are using parallel market exchange rates ranging from between ZWL$8 500.00 to ZWL$11 000.00 against the USD, in complete violation of Government Policy and the country’s anti-money laundering regulations.
The Ministry said measures have since been instituted against the culprits that will result in the suspension and/or cancellation of the trading licenses of the pharmacies. The pharmacies are:
<figure class="wp-block-table alignwide is-style-stripes">
<table style="width: 94.09%;">
<tbody>
<tr>
<td style="width: 31.3609%;">Name of Company</td>
<td style="width: 14.9901%;">Location</td>
<td style="width: 90.7298%;">Observed Violation</td>
</tr>
<tr>
<td style="width: 31.3609%;">Blessed Pharmacy</td>
<td style="width: 14.9901%;">Chegutu</td>
<td style="width: 90.7298%;">Using exchange rate ZWL 10 000.00</td>
</tr>
<tr>
<td style="width: 31.3609%;">Global Pharmacy</td>
<td style="width: 14.9901%;">Kadoma</td>
<td style="width: 90.7298%;">Using exchange rate ZWL 000.00</td>
</tr>
<tr>
<td style="width: 31.3609%;">Leecare Pharmacy</td>
<td style="width: 14.9901%;">Kadoma</td>
<td style="width: 90.7298%;">Using exchange rate ZWL 10 000.00</td>
</tr>
<tr>
<td style="width: 31.3609%;">Pineal Pharmacy</td>
<td style="width: 14.9901%;">Kadoma</td>
<td style="width: 90.7298%;">Using exchange rate ZWL 10 000.00</td>
</tr>
<tr>
<td style="width: 31.3609%;">Greenwood Pharmacy</td>
<td style="width: 14.9901%;">Kwekwe</td>
<td style="width: 90.7298%;">Accepting USD only</td>
</tr>
</tbody>
</table><figcaption class="wp-element-caption"></figcaption></figure>
<figure class="wp-block-table alignwide is-style-stripes">
<table style="width: 94.3202%;">
<tbody>
<tr>
<td style="width: 36.9403%;">Name of compamy</td>
<td style="width: 12.3134%;">Location</td>
<td style="width: 80.2239%;">Observed Violation</td>
</tr>
<tr>
<td style="width: 36.9403%;">Apex Pharmacist Pharmacy</td>
<td style="width: 12.3134%;">Gweru</td>
<td style="width: 80.2239%;">Using exchange rate ZWL 9 500.00</td>
</tr>
<tr>
<td style="width: 36.9403%;">Siegmed Pharmacy</td>
<td style="width: 12.3134%;">Gweru</td>
<td style="width: 80.2239%;">Using exchange rate ZWL 10000.00</td>
</tr>
<tr>
<td style="width: 36.9403%;">Booties Pharmacy</td>
<td style="width: 12.3134%;">Gweru</td>
<td style="width: 80.2239%;">Accepting USD only</td>
</tr>
<tr>
<td style="width: 36.9403%;">Mediplus Pharmacy</td>
<td style="width: 12.3134%;">Rusape</td>
<td style="width: 80.2239%;">Using exchange rate ZWL 10 000.00</td>
</tr>
<tr>
<td style="width: 36.9403%;">Greenview Pharmacy</td>
<td style="width: 12.3134%;">Rusape</td>
<td style="width: 80.2239%;">Using exchange rate ZWL 11 000.00</td>
</tr>
<tr>
<td style="width: 36.9403%;">Kaizen Pharmacy</td>
<td style="width: 12.3134%;">Rusape</td>
<td style="width: 80.2239%;">Using exchange rate ZWL 10 000.00</td>
</tr>
<tr>
<td style="width: 36.9403%;">Necta Care Pharmacy</td>
<td style="width: 12.3134%;">Mutare</td>
<td style="width: 80.2239%;">Using exchange rate ZWL 8 500.00</td>
</tr>
<tr>
<td style="width: 36.9403%;">Lancaster Pharmacy</td>
<td style="width: 12.3134%;">Mutare</td>
<td style="width: 80.2239%;">Using exchange rate ZWL 9 000.00</td>
</tr>
<tr>
<td style="width: 36.9403%;">Murapi Pharmacy</td>
<td style="width: 12.3134%;">Mutare</td>
<td style="width: 80.2239%;">Using exchange rate ZWL 9 000.00</td>
</tr>
<tr>
<td style="width: 36.9403%;">Grey Pharmacy</td>
<td style="width: 12.3134%;">Mutare</td>
<td style="width: 80.2239%;">Using exchange rate ZWL 10 000.00</td>
</tr>
<tr>
<td style="width: 36.9403%;">Central Pharmacy</td>
<td style="width: 12.3134%;">Mutare</td>
<td style="width: 80.2239%;">Using exchange rate ZWL 11 000.00</td>
</tr>
<tr>
<td style="width: 36.9403%;">Manica Pharmacy</td>
<td style="width: 12.3134%;">Mutare</td>
<td style="width: 80.2239%;">Using exchange rate ZWL 10 000.00</td>
</tr>
</tbody>
</table>
</figure>
The Ministry added that the Government remains committed to the broad use of local currency for domestic transactions and stern measures will be taken against service providers who continue to violate provisions.
It urged the transacting public to resist all forms of unfair pricing by retailers and to immediately report violations to the Financial Intelligence Unit.
<img alt="Image" decoding="async" src="https://pbs.twimg.com/media/F0w1R-8aQAISxjN?format=jpg&amp;name=4096x4096"/><img alt="Image" decoding="async" src="https://pbs.twimg.com/media/F0w1SUhaEAEETD0?format=jpg&amp;name=4096x4096"/>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Pharmacies Charging Above Official Exchange Rate Set To Lose Licences

The Zimbabwe dollar on Tuesday, 11 July further strengthened against the US dollar on the Reserve Bank of Zimbabwe forex auction.
According to the Wholesale Foreign Exchange Auction Results today, the weighted average was ZWL$4 998.8352.
This is a significant recovery from last week as the weighted average was ZWL$5 251.0640 at the Wholesale Foreign Exchange Auction Results of 06 June 2023.
Today, 10 bids were received from banks, and all 10 bids were accepted but only 8 bids were allotted.
The RBZ said that the total value of bids accepted was US$5 830 000.00, while US$5 640 000.00 was allotted.
The amount on offer was US$20 000 000.00.
The highest bid rate was ZWL$5 353.7221 while the lowest bid rate was ZWL$4 900.0000.
Meanwhile, the RBZ awarded US$460,130.60 to the retail auction.
The central bank also said all bids for the retail auction within the pre-announced amount were allotted in full.
It added that all bids for the retail auction with overdue CDIs, outstanding Bills of Entry (BOEs), insufficient ZWL and those with sufficient FCA balances were also disqualified.
<img alt="Image" decoding="async" src="https://pbs.twimg.com/media/F0wXSlDXoAI5Y1P?format=jpg&amp;name=4096x4096"/>

Zimbabwe Dollar Official Rate Now $4 998 To The US Dollar

The Confederation of Zimbabwe Retailers (CZR) president Denford Mutashu has urged businesses to reduce prices in Zimbabwe dollars after the local unit recovered against the US dollar last week.
The Zim dollar on Thursday firmed by more than $1 000 against the United States dollar on the Reserve Bank of Zimbabwe (RBZ)’s Wholesale Foreign Exchange Auction following another gain on Tuesday.
On Tuesday, the local currency firmed against the US dollar to ZWL$6 326, from ZWL$6 926 on 20 June.
Speaking in an interview with <a href="https://www.sundaynews.co.zw/prices-stabilise-as-government-interventions-take-effect/">State media</a>, Mutashu said shops should start pricing responsibly following the stability in the exchange rate and improved power supply. He said:
<blockquote>
The expectation is to begin to see prices falling in line with key economic indicators like stability in exchange rates, improved power supply and other Government measures.
We have seen price stability in most retail shops but we want to see more. We want to see them reducing prices relative to economic developments. They should start pricing responsibly.
</blockquote>
National University and Science and Technology (NUST) lecturer Stevenson Dlamini said although businesses haven’t reduced prices, the rate at which prices were going up had slowed down lately.
He added that recent fiscal and monetary measures were starting to bear fruit. Said Dlamini:
<blockquote>
The floating of the exchange rate on the wholesale market has destabilised the parallel market and shown the formal market that the Government is now more committed to the price discovery mechanism of the local currency.
This has been further buttressed by the recent fiscal policy measure that requires the payment of corporate tax in local currency.
This is forcing even firms that were beginning to reject the local currency to start demanding it at the official market exchange rate and thus pushing up the demand and value of the local currency.
</blockquote>
Among the measures introduced by authorities include the RBZ’s sale of foreign currency to banks at market-determined rates for on-selling to bank customers.
The central bank has introduced gold coins and gold-backed tokens which have mopped over ZWL$60 billion.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Shops Urged To Reduce Prices As Exchange Rates Stabilise

There is a serious shortage of the Zimbabwe dollar in the economy which captains of industry and economists say will reduce production capacity and affect aggregate demand.
The liquidity squeeze follows recent fiscal and monetary policy measures to suck out liquidity in the market to stabilise the exchange rate and prices.
The Confederation of Zimbabwe Industries (CZI) president Kurai Matsheza told <a href="https://businesstimes.co.zw/zim-dollar-shortage-hits-market/">Business Times</a> that the liquidity crunch has reduced production capacity and aggregate demand. He said:
<blockquote>
There is a liquidity challenge in the economy and what the liquidity challenge does is depresses aggregate demand as there is no traffic in the shops and at the industries.
We are happy that things have stabilised but with this squeeze, we are failing to make payments for other services because there is no ZWL$ in the market and this has reduced our production capacity.
What it means is less cash in the markets, less product off-take so it means production will go down because companies can’t produce stock as they have no funds.
We, however, hope that this would be temporary and not a long-term solution so that business goes back to normal.
</blockquote>
The Confederation of Zimbabwe Retailers (CZR) president Denford Mutashu said in the past two weeks there has been an increase in US dollar sales but the Zimbabwe dollar sales have significantly decreased.
Economist Gift Mugano said the government has stopped pumping money into the market resulting in a shortage of the local currency.
He added that this confirms the long-held belief that government is the biggest driver of inflation.
Due to the liquidity crunch, the Zimbabwe dollar significantly recovered this week and was trading at ZWL$5 739 to the USD at the Reserve Bank of Zimbabwe (RBZ) Wholesale Foreign Exchange Auction on Thursday, 29 June.
On Tuesday, the local currency firmed against the United States Dollar to ZWL$6 326, from ZWL$6 926 on 20 June.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Captains Of Industry, Shops Bemoan Zimbabwe Dollar Shortage

The Reserve Bank of Zimbabwe’s (RBZ) official exchange rate has moved to almost ZWL$7 000 to the US dollar.
The Weighted Average Rate from the forex auction conducted on Tuesday, 20 June 2023, was ZWL$6 926.5764.
On 13 June 2023, the wholesale weighted average was US$1: ZWL$5 978.6794.
Today, the RBZ said 73 bids were received on the regular forex auction, and all the bids were accepted but only 50 bids were allotted. The total amount allotted was US$1,135,542.46.
On the wholesale auction, 12 bids were received and all the bids were accepted and all received allotments. The RBZ said the total amount allotted wasUS$10,614,000.00
The RBZ said that all bids within the pre-announced amount were allotted in full.
It said bids with overdue CDIs, outstanding Bills of Entry (BOEs), insufficient ZWL and those with sufficient balances were also disqualified.
<img alt="Image" decoding="async" src="https://pbs.twimg.com/media/FzEmboWaMAM6p9d?format=jpg&amp;name=900x900"/>
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Zimbabwe Dollar Official Rate - 20 June 2023

Former Chivi South MP, Killer Zivhu (ZANU PF) has claimed that villagers now prefer barter trade than accept payment for their products in Zimbabwe Dollars.
Zivhu, who was expelled from ZANU PF after he called for dialogue between President Emmerson Mnangagwa and CCC leader Nelson Chamisa, also said touts now measure the local currency in kilogrammes. He said:
<blockquote>
Manga muchiziva here kuti kumamisha, vava kuti marara RTGs, hanzi noumwe Hwindi chingopekai Bond muma 1kg, kombi yava kuita 1kg bond, mumwe muchembere hanzi zviri nani, kundipa 2kg ye sugar ndokupa mugomo we mbambaira, mari inorambiwa chero ne benzi hanzi haitengi. (Did you know that villagers are now saying the Zimbabwe Dollar is now rubbish? One kombi tout said pack ZimDollar notes in 1kg packs because a ride now costs a kilogramme of Zimbabwe dollars. An elderly woman said it is better to give her a 2kg packet of sugar for her bucket of sweet potatoes. Imagine, a currency that even a madman rejects!
</blockquote>
Some manufacturers are reportedly refusing payment in Zimbabwe dollars for some products which are now exclusively available in foreign currency.
The Zimbabwe dollar has been in free-fall over the past few months after the Government tweaked the forex auction system.
Last week, the RBZ set the official exchange rate at US$1: ZW$5 900 while the street rate was hovering at US$1: ZW$9 000.
However, some large retailers were using at least US$1: ZW$10 000 for selected products.
Popular fast-food outlets were rejecting the local currency on the pretext that their point-of-sale machines were not working and therefore could not accept swipe and EcoCash payments.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Even Madmen Now Rejecting Zimbabwe Dollar - Zivhu

The Medical Aid Society of Central Africa (MASCA) has discontinued direct payments to Pharmacies for its members with Zimbabwean Dollar Schemes.
In a communique to members, MASCA said this move was necessitated by the prevailing economic environment and a need to ensure the sustainability of its services. <a href="https://healthtimes.co.zw/2023/06/18/leading-medical-aid-discontinues-zimdollar-payments/">Said MASCA</a>:
<blockquote>
Due to the persistently high volatility of the ZWL exchange rate, we regret to inform you that we will be discontinuing the direct Zimbabwe dollar payments to pharmacies for drug claims effective 15 June 2023 till further notice.
This decision has been made after careful consideration of the current economic circumstances and to ensure the sustainability of our services.
This change affects members on the Zimbabwe dollar schemes (international and local range of ZWL schemes) and members who moved to the United States dollar (USD) schemes who are still on USD waiting periods as applicable.
As a result, you will be required to settle your drug claims in cash at the respective pharmacies.
Thereafter, you can submit your claims to MASCA for processing as refunds payable by the Society in Zimbabwe dollars, based on rates applicable at the time of treatment.
While this development may be disappointing, we want to assure you that we remain committed to providing the best possible support to our members.
As a result, we have taken measures to facilitate the refund process for any pending or future drug claims.
To initiate a refund, we kindly request you to follow the following steps: Supporting documents: Please ensure you have the relevant receipts, prescriptions, and any other supporting documents for the drug expenses incurred. These will need to be attached to the claim form to be submitted to MASCA for processing.
Complete the claim form: Fill in all the required fields on the claim form accurately and provide the necessary details to ensure the smooth processing of your refund.
Alternatively, you can ask the pharmacy dispensing the requested drugs to print a claim form for you, that you can submit with supporting documents described as per point 1 above.
Submit your claim form: Once you have completed the drug claim form, please submit it to our designated email address claimforms@masca.co.zw or drugs@masca.co.zw or visit our offices and drop it off at our claims department.
We understand that the discontinuation of direct payments to pharmacies for drug claims may cause inconvenience, and we sincerely apologise for any difficulties this may cause you.
If you need further information or clarity on how to proceed, please contact our drugs department on any of the following numbers: We will continue to monitor the economic situation closely and explore options that maintain/enhance the acceptability of direct payments by medical service providers.
</blockquote>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Top Medical Aid Discontinues Zimbabwe Dollar Payments

The Reserve Bank of Zimbabwe (RBZ) has set the official exchange rate at almost ZWL$6 000 to the US dollar.
According to the results of the foreign exchange auction conducted on Tuesday, 13 June 2023, the wholesale weighted average was US$1: ZWL$5 978.6794.
On 06 June 2023, the weighted average was US$1: ZWL$3 673.7718, from US$1: ZWL$2 577.0564 on 30 May.
Today, the RBZ allotted a total of US$2,945,406.28, down from US$4,987,432.34 allotted last week, with the bulk of the allotment going to raw materials, followed by machinery and equipment.
The RBZ said that all bids within the pre-announced amount were allotted in full.
It said bids with overdue CDIs, outstanding Bills of Entry (BOEs), insufficient ZWL and those with sufficient balances were also disqualified.
The RBZ added that starting the week beginning 19 June 2023, authorised dealers will submit bids for the two auctions, that is, the forex auction and the wholesale forex auction by 9 AM on Tuesdays.<img alt="Image" decoding="async" src="https://pbs.twimg.com/media/Fyg5E20WIAQl9PI?format=jpg&amp;name=4096x4096"/>
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Zimbabwe Dollar Official Rate Now $6 000 To The US Dollar

The Zimbabwean Dollar has further lost its value this Wednesday, 07 June 2023, from ZWL$3 673.7718 to ZWL$4 868.5152 within 24 hours against the US Dollar at the Wholesale Foreign Exchange Auction announced by the Reserve Bank of Zimbabwe (RBZ).
On Tuesday, the Zimbabwe dollar fell by over $1 000 to average $3 673.7718 against the United States (US) dollar on the foreign currency auction held by the RBZ, down from US$1: ZWL$2 577.0564 on 30 May.
Below are the RBZ Wholesale Foreign Exchange Auction Results for 07 June 2023:
<blockquote>
Wholesale Foreign Exchange Auction Results – 7 June 2023
Number of Bids Received From Banks: 19
Number of Bids Disqualified: 0
Total Number of Bids Accepted: 19
Total Number of Bids Allotted: 10
Total Value of Bids Accepted Amount: USD12,993,000.00
Allotted: USD11,180,000.00
Highest Bid Rate Received: 5,020.0000 
Lowest Bid Rate Allotted : 4,500.0000
Weighted Average Rate: 4,868.5152
<img alt="Image" decoding="async" src="https://pbs.twimg.com/media/FyB3utPWcAMZHUv?format=jpg&amp;name=900x900"/>
</blockquote>

Zimbabwe Dollar Official Exchange Rate Now $4 868

The Reserve Bank of Zimbabwe (RBZ) has no control over the ever-rising black-market exchange rate according to the central bank’s senior payment systems analyst, Howard Tundu.
Tundu made the remarks while speaking at the Consumer Education and Awareness Campaign hosted by the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ) at Jerera Growth Point in Zaka, Masvingo Province. He said:
<blockquote>
As RBZ we cannot control what people do outside the official rates where they have their rates which they use for payments. We are only concerned about the Zimbabwe dollar.
</blockquote>
But Africa Economic Development Strategies executive director Gift Mugano told <a href="https://www.newsday.co.zw/local-news/article/200012491/we-cannot-control-black-market-exchange-rate-rbz">NewsDay</a> in an interview that the RBZ should be concerned about the parallel market rate. He said:
<blockquote>
The pricing regime in the market now is determined by the black-market pricing and the same black market is influenced by policy discord within the government.
The fact that the central bank controls the exchange rate on the auction system has been one of the drivers of distortions.
You can’t say you are only concerned about the official rate. They should be concerned about the black-market rate. This is a sign of accepting defeat.
</blockquote>
The Zimbabwe dollar is currently trading close to $4 000 to the US dollar on the parallel market.
This has resulted in price hikes and the shortage of some basic food items in supermarket shelves where they are sold in Zimbabwe dollars but the same goods are readily available on the informal market and being sold exclusively in US dollars.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

RBZ Cannot Control Black Market Rates, Says Official

Economic analysts have welcomed the measures announced by Finance and Economic Development Minister Mthuli Ncube on Monday to stabilise the country’s economy and the depreciating Zimbabwe dollar.
Among other things, Ncube said with effect from 01 June 2023, Treasury will now fund the Zimbabwe Dollar component of the 25% foreign currency surrendered by exporters. He said this will eliminate the creation of additional money supply.
Ncube also announced that weekly auctions will be limited to a maximum of US$5 million and winning bids at the auction will be paid within 24 hours.
Commenting on the development, economic analysts ZimBollar Institute, said the measures are progressive if “followed to the letter and spirit”. <a href="https://twitter.com/ZimBollar/status/1663272861497212928?s=20">Said ZimBollar Institute</a>:
<blockquote>
To understand the logic behind the (Ministry of Finance and Economic Development) MoF’s measures, one needs to appreciate the mechanics of the foreign currency auction system in terms of its funding. Here we make an attempt to explain.
Exporter A produces and exports goods worth of USD1m. On processing their CD1s, their Bank takes 25% or USD 250k in line with the 25% foreign currency retentions for onward transmission to the RBZ
On receipt of the USD250k, the RBZ is mandated to settle Exporter A with the equivalent of USD250k in ZWL local currency. This effectively increases the supply of ZWL in circulation through the money creation cycle.
The USD250k is then subsequently utilized to settle auction bids at the RBZ Tuesday auction system per the Dutch auction. Since this money is used to settle imports, it effectively represents a drain on forex, since it leaves the country’s borders on payment.
Now look at this: The same ZWL that the RBZ injects as it settles forex retentions will find its way back to demand for foreign currency, hence the huge demand for cheap forex that has remained a perennial phenomenon.
Enter Mthuli’s interventions:
By allowing duties and customs to be settled in ZWL, the MoF has created a demand for the ZWL. Using the same ZWL, Gvt will have the capacity to settle the 25% USD retentions without recourse to printing since they already sit on tax revenue
Three things will happen:
a) Demand for ZWL dollar increases and effectively contains the exchange rate
b) Speculative demand for the USD decreases on account of the auction limit of USD5m
c) By using tax revenues to settle forex retentions they will contain money supply.
Verdict
Masterstroke if followed to the letter and spirit.
</blockquote>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Mthuli Ncube's Measures To Stabilise Zimbabwe Dollar A Masterstroke - Analysts

A 41-year-old police constable, Mengezi Phiri, has been jailed for an effective three years for sexual assault after he was found guilty of inserting his fingers into a juvenile’s private parts, claiming he was conducting a virginity test.
He appeared before Bulawayo regional magistrate Mr Joseph Mabeza, facing a charge of sexual assault, according to <a href="https://www.sundaynews.co.zw/cop-jailed-3-years-for-virginity-testing/">The Sunday News</a>.
Prosecutor Mr Milton Moyo told the court that the incident occurred on 1 February, when Phiri was called by the complainant’s grandmother to escort the juvenile and show him where she had slept since the complainant had not slept at home the previous night.
Along the way, Phiri engaged the girl in a conversation and asked if she had had sex with anyone. He then proceeded to conduct the “virginity test” by inserting his fingers into her private parts and noting down the results in a book.
The incident came to light when the girl was asked to undergo a traditional virginity test by a neighbour, and she disclosed what had happened.
Phiri was then called and asked about the accusation and he denied it leading to him being reported to the police.
In court, Phiri admitted to the crime and was found guilty of sexual molestation. He was sentenced to six years, with three years suspended conditionally, and will serve an effective three years in prison.
<h2><a href="https://www.pindula.co.zw/">More Pindula News</a></h2>

Police Officer Jailed For Sexually Assaulting A Girl Claiming To Conduct Virginity Test

Captains of industry say the deteriorating economic situation and the rapid depreciation of the Zimbabwe dollar is attributable to the creation of “hot money”.
“Hot money” is a form of short-term investing in which investors move their money between financial markets to take advantage of interest rate fluctuations. It is “hot” because it tends not to stay in one market very long.
Market analysts are of the view that large payments to public contractors and suppliers to the Government are some of the sources of the excess liquidity that is shaking the Zimbabwe dollar.
The local currency has fallen to $1 888/US$1 on the official interbank market and more than $3000/US$1 on the parallel market.
Kurai Matsheza, who is the president of Zimbabwe’s largest industrial lobby group, the Confederation of Zimbabwe Industries (CZI), believes that “hot money” is being created in the economy. He was recently quoted by <a href="https://www.businessweekly.co.zw/someone-is-creating-hot-money-industry/">Business Weekly</a> as saying:
<blockquote>
Our suspicion is that it (volatility) can only come from one source; there is (too much Zimbabwe dollar) money chasing the US dollar. As businesses, we do not create money.
So, who is creating this money? We do not know, but we are engaging the authorities to say guys, let’s identify the cause.
But it can only be one way; people have money that is creating this run on the exchange rate.
Some projections are saying we are going to hit US$13 billion this year. So, on the (forex) generation side, there seems not to be a problem.
So, somebody is creating money that is chasing the US dollars.
We are creating hot money nobody wants to hold that Zimbabwe dollar (for long).
As soon as someone gets the (Zimbabwe dollar) money, they want to (quickly) pass it on.
</blockquote>
However, the Ministry of Finance and Economic Development insists it has not printed money since 2017. Said Treasury Secretary George Guvamatanga:
<blockquote>
I will categorically state that since I came into this office, I have never printed money.
Since I came into this office, I have never borrowed even a dollar from the Reserve Bank.
Despite the fact that within the Finance Act, we put a provision that (Treasury) can borrow up to 5 percent of my total budget, but I had an opportunity last year to borrow.
I was in a tight situation and needed temporary accommodation for 24 hours from the Reserve Bank.
My team here refused me to borrow, and that’s how disciplined we have been, so when I pay contractors, that is why we monitor M3 and Reserve Money…, there is no money printing.
What simply happens is that what increases is the velocity of money. The velocity when I have the money here at Treasury, and the velocity when in your account… it is different.
</blockquote>
The velocity of money is a measurement of the rate at which money is exchanged in an economy.
It is the number of times that money moves from one entity to another, or how much a unit of currency is used in a given period of time. Added Guvamatanga:
<blockquote>
As long as I pay from revenue generated from taxes and I am not borrowing from the Reserve Bank of Zimbabwe that should never be an issue at all, because that does not increase the money supply.
</blockquote>
More: <a href="https://zero.pindula.co.zw/">Pindula News</a>

Currency Volatility Attributable To Creation Of "Hot Money" - Captains Of Industry

The Zimbabwe dollar has lost significant value against the United States dollar on the foreign currency auction held by the <a href="https://wiki.pindula.co.zw/Reserve_Bank_of_Zimbabwe">Reserve Bank of Zimbabwe (RBZ).</a>
On 16 May 2023, the weighted average was US$1: ZWL$1,404.8039 up from US$1: ZWL$1,212.5.8 reported on 09 May 2023.
The central bank allotted a total of US$14,444,323.31 down from US$16,349 930.31, with the majority of the allotment going to raw materials, followed by machinery and equipment.
The amount allotted for the Small to Medium Enterprises Forex Auction was US$1,576,700.13 down from US$2,280,785.72, while the Main Forex Auction was allotted US$13,171,159.91 down from US$16,772,580.66.
<blockquote>
♦ Weighted Average Rate moved to 1,404.8039 up from 1,212.5.8.
</blockquote>
<h2>How the money was allocated:</h2>
<blockquote>
Raw Materials …………………………………………. (SME) US$350,687.48 … (MAIN) US$7,007,641.38 
Machinery and Equipment …………………………. (SME) US$415,614.30 … (MAIN) US$1,926,117.50 
Consumables (Incl. Spares, Tyres, Electricals, etc) … (SME) US$202,560.71 … (MAIN) US$1,001,696.74 
Services (Loans, Education, Dividends, Disinvestments, etc) … (SME) US$100,494.32 …. (MAIN) US$983,240.01 
Retail and Distribution (Incl. Food, Beverages, etc) … (SME) US$125,715.23 … (MAIN) US$1,514,194.61 
lubricants Pharmaceuticals and Chemicals …. (SME) US$62,647.17 … (MAIN) US$341,262.52 
Paper and Packaging …………………………….. (SME) US$15,444.19 … (MAIN) US$397,007.15 
TOTAL ………………………………………………. (SME) US$1,273,163.40 … (MAIN) US$13,171,159.91 
GRAND TOTAL AWARDED ……………….. US$14,444,323.31
</blockquote>
Notes 
1. Bids with overdue CD1s, outstanding Bills of Entry (BOEs), insufficient ZWL and those with sufficient FCA balances were also disqualified.
2. Some Bids were allotted on a pro-rata basis.
<h2><a href="https://www.pindula.co.zw/">More Pindula News</a></h2>

Zimbabwe Dollar Further Drops Against US Dollar On RBZ Auction

Some retailers are reportedly refusing payment in the local currency or limiting the number of items people can buy in Zimbabwe dollars, which they say has become very unstable.
The Zimbabwe dollar was reintroduced in 2019 after a decade of the multicurrency system but it has been depreciating alarmingly.
On the parallel market, the Zim dollar is trading between $2 100 and $2 200 to the greenback, and US$1 036 on the official market.
Some retailers in Harare are reportedly limiting the number of items one can buy using Zimdollars.
The products include cooking oil, meat, mealie-meal, rice and beverages. Some shops are selling the products exclusively in US dollars.
An official at one of the country’s leading meat suppliers who spoke to <a href="https://www.newsday.co.zw/local-news/article/200010769/alarm-as-businesses-ditch-zimdollar">NewsDay</a> on Thursday on condition of anonymity said:
<blockquote>
There are some businesses trying to take advantage of the fact that we are selling in local currency to come to dump their Zimdollar stock and then sell the meat or merchandise they buy from us in US dollars.
This has become prevalent, so to dissuade this practice we are limiting stocks on certain products.
</blockquote>
Finance and Economic Development Deputy Minister Clemence Chiduwa told NewsDay that the Financial Intelligence Unit (FIU) was monitoring developments in the retail sector. He said:
<blockquote>
We are getting reports that some supermarkets are demanding payment for certain products exclusively in US dollars.
The Bank Use and Promotion Act applies the same way as trading in the parallel market.
This is illegal and all operators are urged to abide by the laws. We are closely monitoring the market delinquency and deviance which is a violation of the law.
The FIU is taking appropriate action against those who are exclusively accepting USD on certain products.
The continued depreciation of the Zimdollar is due to inflationary expectations mainly driven by parallel market rates.
The resultant instability due to chasing rates is negatively affecting all of us.
Market players should focus on production and the generation of forex.
</blockquote>
Meanwhile, Delta Beverages spokesperson Patricia Murambinda, told NewsDay the company was not responsible for the actions by retailers in charging its products exclusively in US dollars.
More: <a href="https://zero.pindula.co.zw/">Pindula News</a>

Some Businesses Reject Zimbabwe Dollar

The value of the Zimbabwe dollar kept decreasing compared to the United States dollar on the foreign currency auction held by the <a href="https://wiki.pindula.co.zw/Reserve_Bank_of_Zimbabwe">Reserve Bank of Zimbabwe (RBZ). </a>
On April 25, 2023, the weighted average was US$1: ZWL$1,021.2072 up from US$1: ZWL$1,000.0227, <a href="https://zero.pindula.co.zw/zimbabwe-dollar-official-rate-crosses-1-000-mark/">reported on April 19, 2023. </a>
The central bank allotted a total of US$20,742,566.66 up from US$18,905,097.94, with the majority of the allotment going to raw materials, followed by machinery and equipment.
The amount allotted for the Small to Medium Enterprises Forex Auction was US$1,707,854.70 down from US$1,731,764.97, while the Main Forex Auction was allotted US$19,034,711.96 up from US$17,173,332.97.
<blockquote>
♦ Weighted Average Rate moved to 1,021.2072 Uup from 1 000.0227.
</blockquote>
<h2>How the money was allocated:</h2>
<blockquote>
<ul>
<li>Raw Materials ………………………. (SME) US$552,438.20; (MAIN) US$9,575,766.95</li>
<li>Machinery and Equipment …………. (SME) US$581,017.60; (MAIN) US$2,739,872.27</li>
<li>Consumables (Incl. Spares, Tyres, Electricals, etc) – (SME) US$200,791.74; (MAIN) US$1,885,282.66</li>
<li>Services (Loans, Education, Dividends, Disinvestments, etc) – (SME) US$170,760.73; (MAIN) US$1,356,613.01</li>
<li>Retail and Distribution (Incl. Food, Beverages, etc) – (SME) US$132,432.47; (MAIN) US$ 2,172,326.50</li>
<li>Lubricants …………………………. (MAIN) US$31,874.40</li>
<li>Pharmaceuticals and Chemicals … (SME) US$32,943.09; (MAIN) US$617,512.47</li>
<li>Paper and Packaging ……………… (SME) US$37,470.87; (MAIN) US$655,463.70</li>
<li>TOTAL amount alloted to SMEFX134/2023  … US$1,707,854.70</li>
<li>TOTAL amount alloted to MAIN FX140/2023) … US$19,034,711.96</li>
<li>GRAND TOTAL AWARDED ……. US$20,742,566.66</li>
</ul>
Notes
<ol>
<li>Bids with overdue CD1s, outstanding Bills of Entry (BOEs), insufficient ZWL and those with sufficient FCA balances were also disqualified.</li>
<li>Some Bids were allotted on a pro-rata basis.</li>
</ol>
</blockquote>
<h2><a href="https://zero.pindula.co.zw/">More Pindula News</a></h2>

RBZ Forex Auction: Value Of Zimbabwe Dollar Keeps Decreasing

Finance and Economic Development Minister Mthuli Ncube has said the Zimbabwe dollar will remain as legal tender even as the US dollar now dominates local transactions.
At least 77% of transactions are done in the American currency according to the Zimbabwe National Statistics Agency (Zimstat).
Speaking <a href="https://www.bloomberg.com/news/articles/2023-04-22/zimbabwe-dollar-to-stay-finance-minister-ncube-says?leadSource=uverify%20wall">in an interview with Bloomberg TV</a> in London on Friday, Ncube said the extensive use of US dollars doesn’t concern authorities. He said:
<blockquote>
Zimbabwe is very clear, the currency for transaction is the Zimbabwe dollar and the US dollar and we are very comfortable with that. For now, the Zimbabwe dollar exists.
</blockquote>
Zimbabwe is ineligible to access lines of credit from multilateral financial institutions because it owes more than US$14 billion.
According to ZimPriceCheck.com, a website that tracks both official and unofficial rates, the Zimbabwe dollar trades officially at ZWL$1 000 per dollar and between ZWL$1 400 to ZWL$1 800 on the parallel market.
The Zimbabwe dollar was reintroduced as legal tender in June 2019 after being ditched a decade before when hyperinflation rendered it worthless.
Ncube said the Zimbabwe dollar’s return four years ago made domestic manufacturers more competitive, with locally produced products at 80% in most retail outlets. He said:
<blockquote>
It has done a great job. We are very comfortable with both currencies.
</blockquote>
More: <a href="https://zero.pindula.co.zw/">Pindula News</a>

Zimbabwe Dollar To Stay - Mthuli Ncube

The cost of living in Zimbabwe has gone up following a sharp rise in prices of nearly all basic grocery items this week.
Last week, the Zimbabwe National Statistics Agency (ZIMSTAT) announced that annual inflation slowed to 87.6% in March from 92.3% in February this year.
However, the Zimbabwe dollar continues to lose value against all major currencies at both the official and parallel markets.
On the RBZ auction system this week, the Zimbabwe dollar plunged to ZWL$944.71:US$1 from ZWL$671: US$1 in January this year.
According to <a href="https://businesstimes.co.zw/zimdollar-hits-new-low/">Business Times</a>, on the parallel market, the Zimbabwe dollar was this week trading between ZWL$1 600:US$1 and ZWL$1 700:US$1.
In an interview with Business Times on Wednesday, Consumer Council of Zimbabwe executive director Rosemary Mpofu said the cost of living has gone up. She said:
<blockquote>
The cost of living as measured by the CCZ’s low-income urban earner monthly basket for a family of six increased ZWL$489 831 by end of March from a figure of ZWL$441 036 by the end of February, showing an increase of ZWL$48 795.
The reasons for the increase varied from localised high inflationary pressures, exchange rate volatility, and external factors.
Even with smaller-denominated gold coins, trying to curb inflation amid a slump in the country’s currency, we still noticed a huge change in prices.
We see a lot of activity on the parallel market exchange rate which was a major factor in driving inflation.
In terms of the US$ basket, we also noticed a huge change as the basket moved to US$478.82 from US$507.67.
This was a huge increase and it is not good for the consumers.
</blockquote>
A survey by Business Times this week shows that the prices of basic grocery items have gone up:
<ul>
<li>2-litre bottle of cooking oil – from ZWL$3 649.99 to ZWL$4 749.99.</li>
<li>2 litre Mazoe drink – from ZWL$3 600 last week to ZWL$4 149.99</li>
<li>white bread – from ZWL$989 to ZWL$1 399.99</li>
<li>a kilogramme of beef – from ZWL$4132.99 last week to ZWL$6 899.99</li>
</ul>
More: <a href="https://zero.pindula.co.zw/">Pindula News</a>

Cost Of Living Goes Up As Zimdollar Hits New Low

Economics Professor Gift Mugano says increasing productivity is the only way to break the currency cycle in Zimbabwe and reinforce the stability of the Zimbabwe dollar.
Some economic commentators believe that the local currency “is technically dead” as US dollar transactions are now around 80 percent.
Speaking during an interview with <a href="https://www.businessweekly.co.zw/zim-heads-for-another-painful-currency-cycle/">Business Weekly</a>, Gift Mugano said “the easiest policy move” that the government can take to break the currency reforms merry-go-round is to stop corruption and the issuance of statutory instruments. Said Mugano:
<blockquote>
We need to be a productive economy. Arguably addressing production challenges requires a day on its own but off the top of my head, I would argue for the removal of arbitrage opportunities in our foreign currency markets, reform the financing of agricultural models by moving away from state finance to a market system development where actors in the value chains take an active role in financing agricultural production and use of special economic zones as effective vehicles to attract investments.
Most importantly, the easiest policy move that government can take is radically stop corruption and guarantee policy consistency, clarity, and predictability and make a deliberate position to stop the issuance of statutory instruments.
</blockquote>
He also said the new salary increment for civil servants will increase the volume of transactions in US dollars which will in turn result in an increase in “fake US dollars” in the banking system.
Mugano said the “fake” US dollars or US dollars in RTGS are being created by the banking system and Government, combined, through the process of issuance of loan creation and treasury bills which are later discounted. He said:
<blockquote>
The new salaries will also place civil servants in better positions to borrow in the US dollar, which will drum up the electronic US dollar as banks draw more income in the form of interest rates and charges.
The severity of the loans on civil servants and of course other workers from the private sector are centred around the fact that they don’t generate foreign currency.
In the absence of figures of the US dollar balances in the government purse, one can only predict that the new salaries can be destabilising because they are quite significant.
</blockquote>
Since its re-introduction after ten years of a multi-currency system, the Zimbabwe dollar’s value has plunged dramatically.
On 21 March 2023, the official exchange rate was US$1: ZWL$915.
More: <a href="https://zero.pindula.co.zw/">Pindula News</a>

Productivity Only Way To Break Zimbabwe's Currency Cycle - Gift Mugano

The Zimbabwe Dollar is now technically dead and this will be followed by a USD cash crunch, economists have warned.
Economics Professor Gift Mugano has said the Zimbabwean economy has already attained the peak of dollarisation as US dollar transactions are now around 80 percent.
Speaking during an interview with <a href="https://www.businessweekly.co.zw/zim-heads-for-another-painful-currency-cycle/">Business Weekly</a>, Mugano observed that the economy could be heading towards another “painful currency circle” that could have serious implications on investments and confidence. He said:
<blockquote>
If you look at all indicators available, that is, the percentage of transactions in US dollars and the percentage of loans in US dollars, I would argue that we have already attained the peak of dollarisation.
You agree with me that at least 80 percent of loans and transactions are now in US dollars.
Some sectors such as pharmaceuticals have reached a 100 percent level of transactions in US dollars.
Going forward, I doubt if we can make further significant gains as far as the level of dollarisation is concerned.
Rather, I see the economy driving back to the Zimbabwe dollar. In simple terms what I am saying is that we are in the 2013-2018 replay.
</blockquote>
Mugano warned that the banking system and Government, combined, were facilitating a process for the creation of “fake” US dollars or US dollars in RTGS.
He said this is being done through the process of issuance of loan creation and treasury bills which are later discounted. Said Mugano:
<blockquote>
When loans are issued the bank is anticipating income interest rate and associated bank charges yet the borrower is not generating foreign currency, that is, through exports or international consultancy.
Likewise, when the Ministry of Finance and Economic Development issues treasury bills in US dollars which are later on discounted they are technically printing money that is not backed by hard notes in USDs.
This process results in the creation of USD in RTGS which I call fake USDs. To date, our banking system has an estimated figure of US$1,5 billion of USDs in RTGS platform, that is, fake USDs, while the real hard notes are around US$1 billion.
This is the premise of my argument that the Zimbabwe dollar is on its way back.
</blockquote>
An economist with a State-owned financial institution told Business Weekly that the Zimbabwe dollar “is technically dead”, adding:
<blockquote>
I think the Zimbabwe dollar will be lost now, but it will be short-lived.
This will be followed by a US dollar cash crunch down the road, and we begin all over again.
</blockquote>
In 2009, the government abandoned printing Zimbabwean dollars entirely due to hyperinflation and adopted the use of foreign currency in all local transactions.
In early 2019, the Reserve Bank of Zimbabwe (RBZ) announced plans to bring back the Zimbabwe dollar as legal tender.
Since its re-introduction, initially as bond notes, and then as RTGS dollars, the Zimbabwe dollar’s value has plunged dramatically.
On 21 March 2023, the official exchange rate was US$1: ZWL$915.
More: <a href="https://zero.pindula.co.zw/">Pindula News</a>

"Zimbabwe Dollar Technically Dead"

Brains Muchemwa, a Harare-based economist and founder of Oxlink Capital, has said the Government never supported economy-wide use of the Zimbabwe dollar.
His remarks come amid the rapid market-led transition towards the exclusive use of the US dollar in transactions across Zimbabwe’s economy.
In an interview with <a href="https://www.businessweekly.co.zw/govt-is-abetting-dollarisation/">Business Weekly</a>, Brains Muchemwa said:
<blockquote>
 The Government is the issuer and guarantor of the Zimbabwe dollar but has unfortunately been showing a preference for the use of the US dollar over its currency. It started with <a href="https://www.pindula.co.zw/Zimbabwe_Revenue_Authority">Zimbabwe Revenue Authority (ZIMRA)</a> charging duties in foreign currency to the recent gazetting of fines in US dollars.
Indeed, the whole pricing system is fixated with indexation to the US dollar and it all points to the Government that has, in all its actions, never supported the use and wide adoption of the local currency.
</blockquote>
His remarks were supported by another economist, Professor Gift Mugano, who also said the government never supported the use of the Zimbabwe dollar. He said:
<blockquote>
The fact I raised in October 2021, through a parliamentary portfolio committee (on budget and finance in Victoria Falls), I made this admission to the Minister of Finance (Mthuli Ncube), that the easiest way of creating demand for the Zimbabwe dollar is for Government to do all its transactions in the Zimbabwe dollar.
Government is the biggest consumer and spender in the economy. If the Government says trade in the currency of your choice, we do not care, but when you are paying tax (value added tax, corporate tax PAYE), I want my Zim dollar; when the government does that, it creates demand for the Zim dollar.
Businesses will not have the temptation to offload the Zimbabwe dollar, immediately, into the black market economy when they get it because they will know that (at some point) they will need to pay VAT, PAYE and where will they get the money when they need it.
Immediately you are creating demand before you even have production. You have already guaranteed that there is demand for it and people will keep it. That is what is lacking, and in that sense, the Government is failing because it is saying; you pay the tax in the currency of trade because we also want US dollars.
The tragedy becomes the fact that no one will respect the Zimbabwean dollar. They (economic agents) will say because we trade in US dollars; we will pay the Government in US dollars and we are killing our own currency by that measure.
</blockquote>
The Zimbabwe dollar is unstable against major global currencies, a situation that has forced large parts of the economy to transact in the more stable foreign currency.
Most traders and service providers now price their goods and services in US dollars rather than Zimbabwe dollars.
In exceptional circumstances, traders accept payment in Zimbabwe dollars but raise the prices.
Nearly three-quarters of Zimbabwe’s economy is informal which means without bold measures to support the Zimbabwe dollar, the desirability of the local currency will keep waning.
A recent Zimbabwe Statistical Agency (ZIMSTAT) report indicated that approximately 76 per cent of expenditure in the economy was now in  US dollars.
<h2><a href="https://news.pindula.co.zw/">More Pindula News</a></h2>

Govt Never Supported Use Of The Zimbabwe Dollar - Economists

The Minister of Finance and Economic Development Mthuli Ncube said that the government will maintain interest rates at par with inflation to promote the use of the Zimbabwe dollar in local transactions.
Ncube told the <a href="https://www.sundaynews.co.zw/fresh-moves-to-promote-use-of-local-currency/">Sunday News</a> that despite the rise in the use of US dollars in local transactions, nothing has changed in terms of the government’s focus on promoting the Zimbabwe dollar. Said Ncube:
<blockquote>
We are now maintaining interest rates that are at least at par with inflation. Our preference is for positive interest rates, that is what gives currency value. 
Maintaining positive interest rates is one way to maintain the value of the Zimbabwe dollar.
When individuals transact on a day-to-day basis using their mobile platforms, the mobile platform is basically the Zimbabwe dollar, which continues to be used widely. 
Some of the taxes that are collected are paid in Zimbabwe dollars. Then there is demand for those Zimbabwe dollars.
This is a policy that we have in place and it will continue. Nothing has changed in terms of focus on promoting our currency.
</blockquote>
The Zimbabwe National Statistics Agency (ZimStat) recently revealed that percent of local transactions are now in US dollars, with the remainder in local currency.
Furthermore, allocations from the Reserve Bank of Zimbabwe (RBZ) foreign currency auction system have also declined, showing reduced demand for USD.
Ncube said partial dollarisation has helped the country circumvent sanctions which are making it difficult for the country to access affordable loans from international financial institutions (IFIs). He said:
<blockquote>
But because of the sanctions on Zimbabwe, we cannot access credit lines abroad easily.
This then compels us to find ways to ensure that US dollars are available for companies to harness and invest locally.
That is the reason why we are allowing US dollars to circulate. We are circumventing a constraint that we have.
We also subject our domestic currency to the full monetary policy framework.
That is why we have the Monetary Policy Committee, which makes sure that we do not allow money supply, the Zimbabwe dollar, to get out of control.
</blockquote>

Mthuli Says Govt To Maintain Interest Rates At Par With Inflation

Economic commentators say the government should do more to support the Zimbabwe dollar to hold its value alongside the US dollar.
Policy measures introduced by fiscal and monetary authorities are to blame for the waning use of the local currency, several economic observers who spoke to <a href="https://www.businessweekly.co.zw/zimdollar-use-wanes-what-needs-to-be-done/">Business Weekly</a> have suggested.
Last week, the Zimbabwe Statistics Agency (ZIMSTAT) revealed that more and more economic agencies are now using the US dollar for transactions.
The Zimbabwe dollar has been losing value since it was reintroduced in 2019, and this year alone, it has lost 16 percent of its value on the official foreign currency auction system.
Trigrams analyst, Walter Mandeya, said the declining use of the Zimbabwe dollar is a result of several factors. He said:
<blockquote>
[These factors] include a high level of informal cash trading, shortage of ZWL cash available through the banking system (due to unreasonably low limits), inversely the ready availability of USD cash, the high velocity with which the USD moves through the economy in comparison to the ZWL, pricing that discounts USD cash, to mention a few.
We believe that both currencies can co-exist, but the government has to actively encourage the use of the ZWL through incentives, rather than punitive measures.
There is a need for further innovation by both government and the private sector to bring greater confidence in the intermediation role of the formal financial system between these currencies.
Government will need to enact specific laws that add to the protections given to savers and formal intermediates around the use of this dual currency system for the ratios to skew back in favour of the local currency.
</blockquote>
Economic analyst, Kudakwashe Mugova, said the decision to steeply increase interest rates and restrict stock market activities among others discouraged the use of the local currency.
He argued that using US dollar cash is now more attractive than the local currency which is associated with several tax and transaction charges.
Another analyst, Prosper Chitambara, said high levels of inflation forced economic agencies to prefer to transact in a more stable US dollar. He added:
<blockquote>
We need to sustain the reform agenda that government has been implementing, enhance the efficiency of public spending, liberalisation of the foreign exchange market.
I think once we continue on that path, I think that should have a more significant effect on de-dollarising.
</blockquote>
Another economist, Reneth Mano, urged both monetary and fiscal authorities to “embrace global best practice in managing macroeconomic stabilisation crisis.”

Govt Urged To Encourage Use Of Zimbabwe Dollar Through Incentives, Not Penalties

Brokerage firms and economists have predicted that the Zimbabwe dollar will officially close the year trading at between $2 000 and $3 200 against the US dollar.
However, monetary authorities are of the view that the local currency is likely to close the year trading at around $1 500.
The auction market was introduced in June 2020 with the Zimbabwe dollar trading at $22.50 per US dollar.
As of 31 January 2023, the Zimbabwe dollar was trading at $801.60 against the US dollar.
In its outlook for 2023, IH Securities suggested that upcoming elections and treasury activities will cause slight disturbances to the currency. It said:
<blockquote>
The interbank rate depreciated at an average weekly rate of 3 percent during the year 2022.
Applying the same rate of depreciation in 2023, the interbank rate will close the year at $3 177 from $690 recorded at the beginning of the year.
From our view, this will be the best-case scenario considering the downside risk of elections.
</blockquote>
Akribos Capital, an investment firm also forecasted a depreciation of the local currency due to elections this year as well as the slowdown in economic growth in leading global economies like China, the US, and the Eurozone. Akribos said:
<blockquote>
… we expect the exchange rate to close Q1,2,3 between the lower and upper bound of $1 500 — 1 800 against the US dollar while inflation hovers above 250 percent.
</blockquote>
However, Monetary Policy Committee (MPC) member, Persistence Gwanyanya, believes the Zimbabwe dollar will be trading at around $1 000 or $1 500 to the US dollar by the end of the year. He told <a href="https://www.businessweekly.co.zw/zwl-to-depreciate-moderately-this-year/">Business Weekly</a>:
<blockquote>
We have not yet felt any political pressure due to the pending elections so the currency should close at around $1 000 to the dollar, but if we experience a shock either from elections or somewhere else, we should see it at around $1 500 per US dollar.
</blockquote>

Zimbabwe Dollar To Officially Close 2023 Trading At $3 200 Against USD - Analysts

Kombi crews and most shops in Bulawayo are reportedly now rejecting the $20 bill although it is still legal tender in the country.
However, big retail outlets such as OK Zimbabwe, PicknPay, Choppies, and Sai Mart, as well as Government departments are still accepting $20 banknotes.
Kombi crews argue that illegal foreign currency dealers whom they buy forex for fuel and other accessories from, for their fleets are no longer accepting the note.
A shop attendant at a takeaway shop at the corner of Fife Street and 9th Avenue told the <a href="https://www.chronicle.co.zw/businesses-reject-legal-tender-in-bulawayo/">Chronicle</a> that their employer gives them Zimbabwe dollars to use as transport money. She said:
<blockquote>
Kombis are rejecting the $20 note so if we accept it here we will be doing ourselves a disservice because it’s the same money that the employer will give us as transport hence our decision not to accept the notes anymore.
</blockquote>
The $20 note was released into circulation in June 2020 alongside the $10 note.
It remained the highest denomination in the country for a full year until the Reserve Bank of Zimbabwe introduced the $50 note in July 2021.
The country’s highest note denomination is the $100 bill which came into circulation in April this year.
Businesses started rejecting the $5 note in early 2021 against the backdrop of a spike in the prices of goods and services.
A few months later, the market “demonetised” the $10 note as carrying piles of cash became inconvenient for the transacting public.

Shops, Kombi Crews Reject $20 Banknotes In Bulawayo

Civil servants have rejected a US$25 increment offered by the government and are instead pushing for more.
The government recently offered a US$25 increment to public sector employees to give a total of US$200 during the last National Joint Negotiating Council (NJNC) meeting.
However, Apex Council secretary David Dzatsunga told <a href="https://businesstimes.co.zw/civil-servants-want-njnc-disbanded/">Business Times</a> that the NJNC should be disbanded and replaced with a body that allows genuine dialogue. Said Dzatsunga:
<blockquote>
The government offered a US$25 without workers’ consultation and the workers have rejected that amount describing the increment as too little.
Dialogue is still ongoing as we are still expecting the government representatives.
The government is promising to pay US$200 in October but it has not attended to the ZWL component which has remained static.
The medical aid covers, funeral policies and other levies have increased in ZWL$ at a time the local currency remained static and this has left the amount eroded.
If they had been on CBC [Collective Bargaining Chamber] we would have negotiated for the increase of both components but because it is NJNC the government has the upper hand and is dictating the pace.
</blockquote>
Dzatsunga said wages in local currency remained static while the RTGS has depreciated and needs an urgent increment.
Meanwhile, the lowest-paid civil servant is getting ZWL$36 000 per month.
Government workers are demanding a pre-October 2018 salary level of US$540 a month.
This comes as the country’s cost of living for a family of six rose by 263% to ZWL$274 858.75 in the month of August from ZWL$75 757.62 in January.

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