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Wednesday, May 22, 2024
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ZWL liquidity tightening on course

Story by Davison Vandira

THE tightening of the Zimbabwe dollar liquidity by monetary and fiscal authorities is bearing fruit, with banks only bidding for US$10 million at the Reserve Bank Forex Auction Platform, out of the available US$30 million, this Tuesday.

The introduction of extra measures has halted the local currency slide, with demand for the domestic unit also surging after the government issued yet another directive this Tuesday that Quarterly Payment Dates (QPDs) to ZIMRA should be paid exclusively in local currency.

There has been a general deceleration of the Zimbabwe dollar on the alternative market since the promulgation of the liberalisation of the RBZ forex system.

The move reduced the premium between official and black-market rates, thus curbing arbitrage opportunities.

Economic analyst Mr Kudakwashe Mugova says the government has struck the right chord to arrest the downward movement of the local currency which was threatening macro-economic stability.

This is a good sign that is unfolding within our monetary system which has been very problematic in recent months and the tightening of Zimbabwe dollar liquidity is commendable to halt the deteriorating situation,” he said.

The Zimbabwe National Chamber of Commerce (ZNCC)which is holding its annual congress in Victoria Falls this Wednesday, is fully supportive of measures to mop up excess liquidity in the economy.

“It is that time of the that we are congregating to review the year and this time around we are taking the opportunity to weave sustainable engagements with government and understand each other all with a broad view of building the economy,” said ZNCC CEO Mr Christopher Mugaga.

The country’s productive sectors including agriculture, mining and manufacturing have registered significant progress, with the fixing of exchange rate instability set to add efficacy to these critical sectors.

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