Don’t panic over exchange rates: VP

Lincoln Towindo

GOVERNMENT will continue pursuing measures to sustain exchange rate stability, including maintaining tight fiscal and monetary policies while expanding investment options for those with excess Zimbabwe dollar balances to shore up the local currency.

This was said by Vice President Dr Constantino Chiwenga while addressing the Zimbabwe International Trade Fair (ZITF) International Business Conference (IBC) here on Wednesday.

VP Chiwenga said the current exchange rate volatility affecting the market was transitory, adding that exchange rate movements were not “the end of the world”.

“Bold measures are being implemented by Government to foster price and exchange rate stability in the economy,” he said.

“These measures include tight monetary and fiscal policy, insistence on value for money for Government procurement and effective monetary and surveillance by the Financial Intelligence Unit (FIU).

“The transitory exchange rate volatility in the parallel market witnessed in the economy for March this year is merely a reflection of the store of value demand for foreign currency.”

Zimbabwe, VP Chiwenga said, continues to record increased foreign currency inflows, which peaked at US$11,6 billion in 2022 “up from historic averages of around US$5 billion to US$6 billion a year”.

“So, there is no point in rushing as though the world is coming to an end.

“Reflecting this positive development, the country has also been recording current account surpluses since 2019, a critical condition for currency stability.

“As such, Government is staying the course of the current monetary and fiscal policy measures which have proved effective in restoring and sustaining price and exchange rate stability.”

The Reserve Bank of Zimbabwe, said VP Chiwenga, was expanding investment options for corporates and individuals with excess Zimbabwe dollar balances.

He said the Central Bank was preparing to roll out “gold-backed digital products” to complement the Mosi-oa-Tunya gold coins presently on the market.

“This initiative will allow gold coins to be widely traded and in the process expand tradable assets in the economy for store of value purposes and reduce speculative demand for foreign currency.”