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Zvamaida Murwira, Senior Reporter
The Government will capacitate the Liquidity Management Committee so that it effectively coordinates fiscal and monetary measures that will ultimately protect and continue to strengthen the Zimbabwe Gold currency, which has been firming since its introduction in April this year.
The Liquidity Management Committee, comprising officials from the Reserve Bank of Zimbabwe (RBZ) and the Ministry of Finance and Economic Development, Government was set up to control excess money in the market, one major factor that drives exchange rate volatility and inflation.
In his Budget Strategy Paper, Finance, Economic Development Minister, Professor Mthuli Ncube said Government will prioritise policy measures aimed at bring stability to the ZiG.
“Government will prioritise fiscal and monetary policies to support the stability of the domestic currency, the ZWG, and a stable macro-economic environment. Among other interventions, the Liquidity Management Committee will be capacitated to play a greater role in coordinating fiscal and monetary measures that effectively manage liquidity injections into the economy,” said Prof Ncube.
“Tough decisions and measures to re-establish fiscal sustainability will have to be made, covering resource mobilisation and enhancing efficiency of public expenditures, as well as reducing waste. Containing costs of major expenditure heads such as the wage bill and debt servicing will be critical in creating fiscal space and reducing the risk of monetising the budget deficit.”
Some of the measures being employed to stabilise macro and micro economic fundamentals include value for money audits and staggering payments in both local and US dollars.
Treasury has indicated that it made a resolution to run a cash flow budget to ensure expenditure did not go beyond collected revenues.
Prof Ncube said a durable and stable macro-economic environment will underpin the projected strong rebound of 6.5 percent economic growth projected for 2025.
Online Reporter