Economist comment on the continuously firming Zimbabwean dollar.
Written by Skyz Metro FM on July 6, 2023
Skyz Metro FM Reporter
The Zimbabwean dollar has over the past days seen a continuous firming trend against the United States Dollar since last week Thursday following the recent macro-economic policies put in place by the Govenment in May.
According to the wholesale forex exchange rate auction held on Thursday, the local dollar pegged at US$1: $5 739.
This has left an economic surge moving towards the stabilising of the economy and ending weeks of market votality that saw price hiking sky rocketing.
The exchange instability prompted the Government to adopt a raft of interventions geared at stabilising the economy by consolidating the fiscal and monetary policy gains achieved so far under the Second Republic as well as preserving the consumer purchasing power as many consumers are being paid salaries in local currency.
Unpacking the forces influencing the allotments in the forex auction market, independent economic analyst and reseacher, Mr Munyaradzi Mhaka said the anticipated price stability implies that consumers can regain lost confidence in the Zimbabwean dollar.
”Indeed this is a welcomed development from a consumer perspective. This a temporary reprieve for consumers and the economy at large.
Evidently, price stability implies that consumers can regain some lost confidence in the Zim$.
It’s a semblance of sanity. This is much attributed to the monetary authorities’ decision to stop issuing new money into the economy, the revision of the interest rates back to 200% again to starve speculative borrowers, and the issuing of gold coins to squeeze and mop up excess liquidity out the market”, he said.
Mhaka added that if the current efforts materialise and is sustained, the economy would be concurrently rejuvinated.
”In the long run, if this stability is sustained the issue of economic growth can actually be addressed positively. Predictions for the future economic trends thus becomes much easier then”, he said.
Local business mogul, owner of Ngamla Proffessionals, Mr Mpumelelo Phiri said the stabilising of the exchange rate meant the lowering of prices by producers. He said it is up to the business owners to now quickly abide with the new sane rates for smooth flow of relations with consumers.
”Business owners are quick to hike prices when rates sky-rocket, but when they start stabilising they take forever to followsuit. We should be able to compliment and match govenment efforts so we can stabilise our own currency and build reputable relations with our clientelle”, he said.