The Economists Roundtable of Zimbabwe (ERTZ) has applauded Government for the introduction of Statutory Instrument 142 of 2019 by the Reserve Bank of Zimbabwe (RBZ) which effectively replaced the multi-currency system with mono-currency system in Zimbabwe.
The S.T 142 of 2019 marked the return of the Zimbabwe Dollar which will be trading at 1:1 with the RTGS/Bond currency already in circulation.
Speaking at a press briefing at the Rainbow Tours Hotel in Harare yesterday, ERTZ President, Professor Ashok Chakravatie commended Government and revealed that the S.I 142 of 2019 will see the demand for RTGS/Bond rising and the demand for US Dollar depreciating leading to the plummeting of the parallel exchange rate.
“We are grateful to Zimbabwe for the introduction of the Statutory Instrument and the measures put in place to safeguard the newly introduced Zimbabwe Dollar.
“Since everything was now being charged in foreign currency, the introduction of the mono-currency system will most likely see the demand for RTGS/Bond rising leading to the black market rate going down,” said Professor Chakravatie.
Speaking at the same event, ERTZ member, Sphelani Javangwe shared the same sentiments and claimed that the high inflation rate was hindering business and affected the standard of living of employees.
“The S.I 142 of 2019 will arrest the rate of inflation and provide a conducive environment to conduct business.
“The pricing perspective had led to businesses closing as they could not find a stable pricing system since the price was chasing the parallel market rate” Jabangwe said.
He added, “We are happy that results have been very swift with the parallel market already recording a decrease and the expectation is that the impact will flow to pricing.”
Prof Chakravartie also applauded Government on the upward review of the interest rates to 50% as this will discourage speculators from taking huge amount of loans and hoarding the US Dollar or hoarding goods.
He said, “The review of the interest rate will discourage speculators into borrowing huge amount of money in order to hoard foreign currency or goods as they may not have confidence on the new currency.
“This will lead people to spend the money they have, hence money will go into circulation and benefit everyone.”
ERTZ also praised the move to ban cash withdrawals from Nostro/FCA accounts. The move will see all forex being traded in exchange for the Zimbabwe Dollar using the interbank rate.
Prof Chakravatie revealed, “Exporters and Nostro/FCA account holders are holding in excess of US$900 million which should be circulating in the Zimbabwe economy and not held by a few.”
Prof Chakravatie also commended Government for listening to advice, claiming that the ERTZ encouraged Government to control the fiscal deficit which it duly did and now there is surplus deficit.
He concluded by urging Government to enforce more measures to safeguard the Zimbabwe Dollar which include making all statutory payments to Government to be in RTGS/Bond.
He also said systems should be put in place for regular person to easily access foreign currency when they need it but was quick to stress that as ERTZ, they were satisfied with the measures put in place so far.