Gvt announces additional measures to stabilize exchange rate

Staff Reporter

Government has announced additional measures that are meant to stabilize the exchange rate and build confidence in the market.

Speaking through a press statement, Minister of Finance and Economic Development Professor Mthuli Ncube said that the Government of Zimbabwe had recently taken significant steps to stabilize the exchange rate as announced through the Presidential Policy Statement.

Minister Ncube said that Government had resolved to continue using the US dollar for a period of five years.

“Government has clearly stated its intention of maintaining a multi-currency system based on dual use of the US dollar and the Zimbabwe dollar. However, the market lacks confidence that the Multi-Currency system is here to stay for the foreseeable future. To eliminate speculation and arbitrage based on this issue, the Government has decided to embed the multi-currency system and the continued use of the US dollar into law for a period of five years,” said Minster Ncube.

The Minister added that there must be no discounting for payments made in US Dollar.

“While economic agents are free to price their goods in US dollars or Zimbabwe dollars, and there are no price controls, the equivalence of US dollar prices and Zimbabwe dollar prices for a community should be strictly based on the current interbank exchange rate as determined by the Willing Buyer Willing Seller rate.

“No discounting of prices for payment made in US dollars shall be allowed and the law provides for strict criminal and civil penalties including US dollar-based fines, suspension or cancellation of business /trading licenses for offenders amongst other penalties,” said Minister Ncube.

Meanwhile, Minister Ncube said that Government had taken action on stabilizing the price of fuel.

“The actions have included downward review of Government Fuel Levies and Releasing of Fuel from the Strategic Fuel Reserve.

“This week, Government completely removed the Levy on Diesel that brought it to Zero Cents, and significantly dropped the levy on Petrol. This action prevented the price of fuel from breaching the USD2.00 per litre mark,” said the Minister.

Minister Ncube said that the selling price of maize to millers would be at ZWL106 680.

He articulated that the Government would expedite the importation of maize available in Malawi and Zambia, while wheat would be sourced from cheaper source markets.

Minister Ncube said that the Government of Zimbabwe remained committed to maintaining macro-economic stability and the elimination of harmful and destabilizing arbitrage conditions that had pervaded the economy at the expense of the generality of citizens.