By Business Reporter
In a move aimed at stabilizing Zimbabwe’s macro economy and run-away exchange rate, Finance Minister Professor Mthuli Ncube has announced a raft of new measures that he says will help to address the issue of macro-economic instability that has been plaguing the country.
In a statement, the Minister noted that despite the country’s strong fundamentals, there has been a resurgence of macro-economic instability, driven by the preference for the US dollar as a savings currency.
This has led to significant pressure on the exchange rate, with a growing USD cash economy, and a large portion of domestic transactions being conducted in foreign currency.
To address this, the Minister announced several policy measures, including the exemption of all proceeds from domestic sales in foreign currency from the 15% surrender requirement.
“In order to promote the banking of domestic sales foreign currency in the banking system, the Reserve Bank of Zimbabwe will with effect from 15 May 2023, exempt all proceeds from domestic sales in foreign currency from the 15% surrender requirement.
“All external loans to the Government will now be transferred from the Reserve Bank of Zimbabwe to Treasury,” he said
He also said that all external loans to the government would now be transferred from the Reserve Bank of Zimbabwe to Treasury, and that the foreign exchange auction system would be fine-tuned to auction a pre-announced envelope on a pure Dutch auction basis.
In addition, the Minister lifted all restrictions on the importation of basic goods to enhance their supply to the public.
“In order to enhance the supply of basic goods to the public, all basic goods will no longer be subject to import licences, and will also come into the country free of import duties and taxes,” said Prof. Ncube
He also noted that the government would endeavour to promote the growing use of the local currency for domestic transactions by ensuring that levies and fees charged by its affiliated agencies and service providers are to be paid for in local currency.
To discourage speculative borrowing and reduce the velocity of the Zimbabwe dollar, the Minister announced measures to restore real savings rates in the economy, including the review of the domestic interest rate framework to make domestic currency savings interest rates attractive to savers.
