THE Government is working on a raft of measures aimed at strengthening the local currency and addressing the runaway black market exchange rate that has seen workers’ earnings and buying power being eroded.
In an interview in Bulawayo yesterday, Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube said the local currency instability was driven by various factors including mischief, speculative behaviour and positioning, high demand of foreign currency due to softening commodity prices, among other factors.
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Book NowProf Ncube said the Government was aware of what was happening and was working on putting in place measures and policies to deal with the instability that would be announced soon.
Professor Mthuli Ncube
“The parallel market currency has been weakening. I have been given the prices and obviously as Government this is an issue of concern to us and we have a programme of dealing with it. As we speak we have certain programmes that we are crafting and putting together in order to deal with it and ensure there is stability within the economy and our domestic currency has value and ceases to be volatile. We are working on that as Government,” said Prof Ncube.
He said the local currency was depreciating due to a cocktail of factors some of which were contributed by players in the local market.
“It is a combination of things, first of all, just sheer speculation, players in the market taking positions because they are thriving for profits, they always do that. We have traders and also retailers who have different ways in which they can take advantage of volatility and position themselves all for the sake of making profit. So for some it is mischief, some speculative behaviour and positioning,” said Prof Ncube.
However, he said it was the time of the year when foreign currency demand was high and at the same time the supply was lower because of the fall in commodity prices which also contributes towards the depreciation of the local currency.
“Over the past year, commodity prices have been falling. The prices of lithium, platinum and other commodities have been falling and this has been showing in our receipts in terms of export earnings in hard currency. All of this is having a negative impact on the currency. You will notice that Zimbabwe is not alone in this currency volatility, we are seeing this across the region and across Africa and this is a sign of the times that reflects the fall in commodity prices and other challenges that other currencies are facing. So we are taking action as Government,” said Prof Ncube.
The parallel market rates have been skyrocketing with some pegging it at US$1:ZWL$17 000, while the official rate was ZWL$10,501.4715 against US$1 on Friday.
Professor Ncube was at Mkhithika Primary School, Cowdray Park yesterday where he donated soccer uniforms to six schools at the suburb. This was in fulfilment of a promise he made during the run-up to the 2023 general harmonised elections. Mkhithika Primary School, Mahlathini Primary School, Tategulu Primary School, Cowdray Park School, Luveve High School, Vulindlela High School and Cowdray Park High School were the recipients.
Sundaynews
