Chronicle EditorBusiness Writer
ZIMBABWE Stock Exchange (ZSE)-listed firms have praised the ZiG currency for stabilising prices and restoring confidence in the market.
While challenges remain, the stable currency environment has encouraged business growth and facilitated more efficient Government revenue collection.
While noting a few bottlenecks that affect operations, listed companies noted in their recent financial statements that the stability of the ZiG had seen an increase in transactional use of the local unit.
The stable currency environment allows for better pricing and market conditions, encouraging businesspeople to expand their enterprises, they said.
With a stable and predictable currency, tax payments have become more straightforward, reducing evasion and increasing compliance.
This enhanced revenue collection, supports public services and infrastructure development, further stimulating economic growth.
In a trading update for the first quarter ended June 30, Hippo Valley Estates said a cash-flow mismatch is resulting in fewer than required US dollar-denominated receipts for critical imports.
“While the introduction of the new currency has demonstrated its potential to anchor the economy through stabilisation of prices, and restoring confidence, there is currently a cash-flow mismatch between the two major trading currencies, which is resulting in limited US-dollar denominated receipts than required for critical imports and other local supplies, which are currently priced in USD,” said the firm.
“The company continues to engage customers and suppliers of goods and services for a win-win currency mix on settlement to ensure business viability and sustainability.”
The impact of the ZiG and fiscal and monetary measures are expected to sustain macro-economic stability in the short term and the medium to long-term impact can be ascertained after policy refinements.
Cafca secretary, Caroline Kangara, said the third quarter trading environment has been stable, attributing it to the introduction of ZiG and increased transactional use of the US dollar.
She, however, revealed that foreign currency access via the willing-seller willing-buyer market has remained challenging.
The company said the impact of the drought, decline in commodity prices and inadequate power generational performance would continue to moderate infrastructure development in the period ahead.
In June, the International Monetary Fund (IMF) affirmed the ZiG stabilisation effect on the economy noting that if macro-stabilisation is sustained, cumulative inflation in the remainder of the year is projected at about seven percent.
The ZiG was introduced in April to address exchange rate volatility, curtail inflation and restore macroeconomic stability. It is backed by precious minerals, mainly gold, and foreign currency.
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