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Wallace Ruzvidzo Herald Reporter
All legitimate requests for foreign currency made through proper banking systems will be fully satisfied as the country’s reserves are well stocked to meet demand, Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube has said.
Further, the Government will soon be introducing measures to ensure that no exchange rate, other than the official rate, will be used for the pricing of all goods and services.
In a statement yesterday, Prof Ncube said all procedural foreign currency requests would be fulfilled as the country had enough reserves in its vault.
“In order to stabilise the value of the ZiG, Government has introduced a liberalised foreign exchange market, where the exchange rate is freely determined by the banking system based on demand and supply.
“This is supported by a pool of gold and foreign exchange reserves at the RBZ, which is more than adequate to back the local currency money supply in circulation.
“The availability of such reserves will ensure that all bona fide and legitimate requests for foreign exchange made through the banking system will be fully satisfied.”
The Government, said Prof Ncube, was now moving to institute measures that ensure strict adherence to the official rate and restrict parallel market activities.
He said there was no need for an alternative exchange rate as the official rate was determined by demand and supply.
“It should be noted that since the exchange rate is market-determined, there is no basis for private and public organisations and economic agencies to use any other exchange rate in the pricing of their goods and services, other than the prevailing average interbank foreign currency selling exchange rate, as published by the Reserve Bank of Zimbabwe.
“To ensure orderly pricing, Government will soon be introducing the necessary regulations to ensure that no exchange rate other than the official rate will be used for the pricing of all goods and services,” he said.
Prof Ncube consequently urged all stakeholders, including retailers and service providers, to accept the recently introduced ZiG currency.
Statutory Instrument 60 of 2024, Presidential Powers (Temporary Measures) legalised and operationalised the new currency, thus the Government and banks immediately started transitioning to these new currency arrangements.
“In light of this, the ministry emphasises the urgency and importance of a swift transition and market adoption of the ZiG by all stakeholders. We call upon all MDAs and the private sector, including retailers and service providers, to accept the ZiG in all financial transactions, including payments of salaries as well as for procurement.
“This collective effort will contribute to the smooth transition towards a more stable economic environment.
“Furthermore, unless there is specific legislation allowing charges or fees to be collected in USD only, all collections by Government and the private sector shall be made in ZiG or any of the currencies in the multi-currency basket, without insisting on a specific type of currency or indexing invoices to the USD,” he said.
The Second Republic, said Prof Ncube, would continue championing measures to restore confidence in the country’s financial system and provide a conducive business environment.
He also implored the media to take an active role in promoting the acceptance and adoption of the ZiG.
“As Government continues to configure its Public Finance Management System (PFMS) to facilitate revenue collection and payment for goods and services in local currency, all ministries, departments, and agencies (MDAs), and the private sector alike, are hereby advised to accept and recognise the ZiG as the official currency for all financial transactions, and payment for all goods and services, effective immediately.
“We urge the media fraternity to support the Government by widely publicising the new currency in order to promote acceptance and adoption by the market,” said Prof Ncube.
Economists welcomed the announcement on foreign currency availability for legitimate requests, saying it would go a long way in impeding parallel market activities.
In an interview yesterday, economist, Mr Persistence Gwanyanya, said the development would see increased functionality and growth of the economy.
“Now that the RBZ has adequate forex reserves, market participants have to normalise using the formal banking channels for access of foreign currency for their import requirements.
“This requires the interbank markets to be more efficient. That some are still facing some challenges in accessing forex on the interbank is not a reflection of lack of forex but clearly a reflection of the fact that the interbank market had become rusty due to inactivity and needs a bit of oiling of the different parts making it.
“One should always remember that bank deposits are not liquidity. As the market adjusts, we will definitely see a huge improvement in the functionality and therefore access of forex from the interbank market,” he said.
Another economist, Mr Trust Chikohora said the seamless accessibility of foreign currency to legitimate seekers would be progressive for business operations and ultimately the country’s economy.
“We hope that it means anyone who wants to import something or pay for any bona-fide foreign service can be able to do so in the bank in the normal course of business without any undue delays.
“If that were to happen, then it will greatly reduce any parallel market activities,” he said.
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