Government, through the Reserve Bank of Zimbabwe (RBZ), will begin drawing down a new US$500 million facility tomorrow to supply the interbank foreign currency market, in a development that monetary authorities say will “go a long way to stabilise the exchange rates and prices of goods and services in the economy”.
In an announcement on Twitter yesterday, the central bank said the funds will help to meet foreign currency payments for both businesses and individuals.
Reacting to the announcement, Finance and Economic Development Minister Professor Mthuli Ncube also indicated that the facility, which has been raised from international banks, “will increase the supply of foreign currency for imports, for industry and other sectors”.
The apex bank introduced the interbank market in February this year to promote a market-determined exchange rate through trading on a willing-buyer, willing-seller platform.
However, individuals and companies have not been able to readily access foreign currency on the market as it was considered inefficient.
Worryingly, the exchange rates have also been lagging behind the parallel market, forcing potential buyers to shift to the latter, which has proved to be disruptive to local pricing system for goods and services.
The initiative is likely to be complemented by industry, which has since resolved to work closely with Government and labour in urgently developing an action plan that is expected to stabilise prices of basic commodities and determine fair remuneration for workers in order to “arrest” current distortions that are causing consumer discomfort.
Business believes that “the basic economic fundamentals are positive” and “the economy is currently generating (foreign) currency that should be enough for the economy”.
Business membership organisations (BMOs), who included representatives of industry, agriculture, mining, banking and the retail sector, agreed at a high-level meeting held in the capital on Friday that the challenges that are being experienced in the economy can be directly linked to foreign currency availability and pricing distortions.
“Our economy is in a position of imbalance due to distortions that need to be attended to so as to bring it back into balance with actions that will stabilise the exchange rate and also restore the purchasing power of consumers.
lf these distortions are not attended to, they will continue to cause further distortions and damage across all sector of the economy,” said Confederation of Zimbabwe Industries (CZI) president Mr Sifelani Jabangwe, who chaired the meeting.State media
