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Wednesday, July 17, 2024

Multicurrency system extension applauded by the business community

Story by Stanley James, Business Editor

THE business community has welcomed the extension of the multicurrency system to the end of 2030, saying the move will consolidate macro-economic gains, increase confidence and steer the economy in the right direction.

The move by the government to extend the period of the multicurrency system in the economy from the initial cut-off duration of 2025 to 2030 has set the tone for the continuation of the economic growth trajectory.

Southern Cotton Company Managing Director, Mr Caos Nzenze described the extension of the multi-currency regime as an important element in increasing confidence, facilitating future plans, and ensuring the viability of the banking sector.

“It is coming in the right direction, remember some banks had reduced or cut lending US dollar loans due to concerns about the currency’s future in 2025 but now that there is a clear direction then we are likely to see more bank loans to productive sectors,” he said.

Industrialist Mr Archie Dongo speaks on the implications of maintaining the United States Dollar in the country’s payment systems alongside other currencies until 2030.

“ The extension reflects the ability of the Government to understand the current market dynamics, identify challenges, and resolve them so now that it is in motion we anticipate increased or sustained development projects,” he said.

The extension of the multi-currency system is being made to allow more time to solve macro-economic challenges, to pave the way for the reintroduction of an exclusive local currency.

Research by a local bank indicates that although the multi-currency regime which is being dominated by the US dollar, is providing stability, sustainable growth remains a challenge as the move limits the authority of the central bank on monetary policies to stimulate growth.

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