As monetary woes persist
As monetary woes persist
Inflation in Zimbabwe remain elevated at 72% for March.
As industry and economic experts press for official dollarisation of the economy, Zimbabwe is to introduce a new ZWL100-denominated note, the highest bill in circulation in its economy.
The new note comes as local currency prices of goods and commodities are galloping and adds onto existing bills of ZWL10, ZWL20 and ZWL50.
There has however been little cheer to the announcement of Zimbabwe’s new ZWL100 bill, amid fears that the country is spinning back into hyper-inflation.
"It will not change anything. If anything, the ZWL100 note will mean that some traders will no-longer accept the other lower denominated bills," said a Zimbabwean teacher who also doubles up as a street trader on the streets of central Harare.
Finance Minister Mthuli Ncube on Wednesday gazetted Statutory Instrument 68A of 2022 which stipulated introduction of the new Zimbabwean note.
"This notice may be cited as the Reserve Bank of Zimbabwe [issue of 100-dollar banknote] notice of 2022. There shall be issued, in terms of the Act, a 100-dollar banknote," reads a part of the statutory instrument.
President Emerson Mnangagwa's administration insists that the economy will not fully dollarise while the IMF is urging for exchange rate liberalisation.
"Concerted efforts are needed toward greater exchange rate flexibility by allowing a more transparent and market-driven price process.
Directors called on the authorities to phase out exchange restrictions and multiple currency practices as soon as conditions permit," the IMF said in a recent country note on Zimbabwe.
Inflation
But with inflation remaining elevated at 72% for March, prices have been rising, with supermarkets, including Pick n Pay and OK Zimbabwe - forced to frequently adjust their pricing. Lower denominated notes have also started to occasion transacting challenges.
The central bank has just allowed individual and corporate holders of free funds (foreign currency) to trade their hard currency on a willing-seller-willing-buyer basis with banks.
It has also hiked bank policy rates and further tightened reserve money targeted in measures seen as protectionist for the struggling local unit.
Prosper Matiashe, an equities trader, advised Zimbabwe policymakers to "stop the forex auction, have transparent and market-driven forex market and have one single currency, the ZWL of course but (only) when conditions permit".
The forex auction system, where the ZWL is trading at US$1: ZWL145, is the forex market where Zimbabwean corporates are supposed to source their hard currency.
However, in reality and due to inadequate supplies of foreign exchange, companies are forced to go on the streets, where the local unit of exchange is trading at up ZWL300 to the greenback. -Fin24/Bloomberg
The new note comes as local currency prices of goods and commodities are galloping and adds onto existing bills of ZWL10, ZWL20 and ZWL50.
There has however been little cheer to the announcement of Zimbabwe’s new ZWL100 bill, amid fears that the country is spinning back into hyper-inflation.
"It will not change anything. If anything, the ZWL100 note will mean that some traders will no-longer accept the other lower denominated bills," said a Zimbabwean teacher who also doubles up as a street trader on the streets of central Harare.
Finance Minister Mthuli Ncube on Wednesday gazetted Statutory Instrument 68A of 2022 which stipulated introduction of the new Zimbabwean note.
"This notice may be cited as the Reserve Bank of Zimbabwe [issue of 100-dollar banknote] notice of 2022. There shall be issued, in terms of the Act, a 100-dollar banknote," reads a part of the statutory instrument.
President Emerson Mnangagwa's administration insists that the economy will not fully dollarise while the IMF is urging for exchange rate liberalisation.
"Concerted efforts are needed toward greater exchange rate flexibility by allowing a more transparent and market-driven price process.
Directors called on the authorities to phase out exchange restrictions and multiple currency practices as soon as conditions permit," the IMF said in a recent country note on Zimbabwe.
Inflation
But with inflation remaining elevated at 72% for March, prices have been rising, with supermarkets, including Pick n Pay and OK Zimbabwe - forced to frequently adjust their pricing. Lower denominated notes have also started to occasion transacting challenges.
The central bank has just allowed individual and corporate holders of free funds (foreign currency) to trade their hard currency on a willing-seller-willing-buyer basis with banks.
It has also hiked bank policy rates and further tightened reserve money targeted in measures seen as protectionist for the struggling local unit.
Prosper Matiashe, an equities trader, advised Zimbabwe policymakers to "stop the forex auction, have transparent and market-driven forex market and have one single currency, the ZWL of course but (only) when conditions permit".
The forex auction system, where the ZWL is trading at US$1: ZWL145, is the forex market where Zimbabwean corporates are supposed to source their hard currency.
However, in reality and due to inadequate supplies of foreign exchange, companies are forced to go on the streets, where the local unit of exchange is trading at up ZWL300 to the greenback. -Fin24/Bloomberg
Kommentaar
Republikein
Geen kommentaar is op hierdie artikel gelaat nie