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Saturday, May 25, 2024

Zim dollar appreciates for the first time on the interbank market

Story by Davison Vandira

The foreign currency exchange rate is fast responding to the recently instituted monetary and fiscal measures, with the Zimbabwe dollar having appreciated on the interbank market.

The recent wholesale measures have however helped in mopping up excess liquidity of more than ZW$200 billion in the past three weeks and the liberalisation of the exchange rate seems to have discovered the natural market position of the local currency.

According to Reserve Bank of Zimbabwe (RBZ) Monetary Policy Committee member, Mr Persistence Gwanyanya, the obtaining situation is working according to plan, with the exchange rate expected to further stabilise.

“It is exciting to note that there has been a quick positive response of the exchange rate after the introduction of new measures and authorities have pledged to monitor the situation with a very keen eye to maintain consistency that will breed confidence,” he said.

Development economist, Dr Prosper Chitambara believes exchange rate stability is the key macroeconomic indicator and once the right formula has been established as is the case on the interbank it should be guarded jealously.

“It seems the liberalisation of the exchange rate has done the trick for confidence building as we are starting to note from the signals coming from the interbank market which has seen the ZWL gaining value over the USD for the first time.”

The Latest monetary and fiscal measures are aimed at strengthening demand for the Zimbabwe dollar by directing m duties and other statutory obligations to be paid in the local currency.

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