By Almot Maqolo.
HARARE -(News of The South) – Zimbabwe government has created a currency stabilisation task force meant to stabilise the exchange rate and lowering inflation.
This comes against a background of recent exchange rate volatility, which has translated into unsustainable levels of inflation. Zimbabwe dollar has rapidly deteriorated on the parallel market to trade between 35-40x against the US dollar.
Briefing the media, treasury chief Mthuli Ncube said the southern African nation is taking measures to stabilise the exchange rate and top bring down inflation to sustainable levels in order to achieve macro-economic stability.
“Macro-economic stability is an essential component of the Transitional Stabilisation.
Programme, critical for economic growth and the achievement of the goals set out in President Emerson Mnangagwa’s Vision 2030.
“In order to stabilise the exchange rate and hence, to lower inflation, the Government has decided to implement a holistic package of key policy measures. In this regard, a Currency
Stabilisation Task Force has been set up,” he said.
However, this will be spear-headed by the treasury and the Reserve Bank of Zimbabwe, and will include members of the MPC and PAC.
The Task Force will be chaired by the treasury chief and will meet at least once a week to review the conditions in the markets, monitor the behaviour of key variables such as the exchange rate and inflation and to ensure that the measures that I outline below are
expeditiously implemented.
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"The Task Force will put in place additional policy measures, where necessary," he said.
Zimbabwe has had no transparent and effective foreign exchange trading platform for a long time. Consequently, official rates have not been effectively determined, while a thriving parallel market has developed.
“To correct this anomaly, an electronic forex trading platform based on the Reuters system is being immediately put in place. This platform will allow foreign exchange to be traded freely amongst the banks and permit a true market exchange rate to be determined,” he said.
The Bureaux de Change, will also participate on this platform through their Authorised Dealers.
“The trading rules of the Bureaux de Change are being liberalised so that they can conduct all wider range of transactions,” Ncube said.
RBZ will continue to be a significant player in the market, providing liquidity to stabilise the exchange rate, where necessary. This mechanism will be immediately operational.
“All the foreign exchange requirements will be available through the interbank market which will use a market determined exchange rate,” he added.
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