Government works to restore economic stability
THE Reserve Bank of Zimbabwe (RBZ) has assured the public that adequate measures to address currency instability experienced in the country in the past month are being implemented to try and bring economic stability.
Speaking at the recent Zimbabwe National Chamber of Commerce (ZNCC) 2023 annual congress here, RBZ director for economic research and policy Dr Nebson Mupunga said there has been notable stability in the past few days owing to the impact of some measures by the Government.
He was responding to concerns by captains of industry and economists who implored the Government to come up with measures that can urgently arrest the runaway exchange rate and restore economic stability.
Zimbabwe National Chamber of Commerce (ZNCC)
Earlier participants had said the prevailing exchange volatility would negate economic growth trends set by the Second Republic if not addressed as a matter of urgency.
They said some investors were being sceptical about investing in Zimbabwe because of the currency volatility challenge.
The need for a return to local currency as opposed to using the United States dollar as a store of value and for transactions and balancing between the informal and formal sectors became topical during discussions.
Dr Mupunga said the role of the local currency was to support the formalisation of the local agenda.
“We have identified some challenges that were fuelling instability and among them is money supply.
That has now been taken up by the Government and going forward the injection will be moderate,” he said.
“Normally what drives inflation is money injection, which is why we have gone towards gold tokens as a store of value.”
Dr Mupunga said annual inflation had risen to 175 percent in June with monthly inflation clocking 74,5 percent from 15,7 percent in May but noted that there has been stability in the past few days.
Participants said most investors were sceptical about investing in Zimbabwe because of the volatility of the local currency. Economist Mr Eddie Cross said currency instability was the country’s number one challenge.
Mr Eddie Cross
“You have to get the currency thing under control because if you don’t there is no future for Zimbabwe,” he said while responding to a presentation by the chairperson for the Parliamentary Portfolio Committee on Industry and Commerce, Joshua Sacco (MP), who said for the country to be competitive,“we need our own currency and we will be outpriced if we continue using the United States dollar.”
Another legislator, Temba Mliswa, urged the Government to come up with strategies that burst corruption and restore confidence among citizens.
Temba Mliswa
Forward pricing and parallel market were also identified as the biggest challenges facing the economy.
The congress ran under theme: “Transforming economic realities into market opportunities.” — @ncubeleon
-chronicles
