Zimbabwe authorities troubled by tumbling new currency
Zimbabwe authorities troubled by tumbling new currency
Zimbabwe Authorities Troubled by Decline in New Currency
MOUNT HAMPDEN, ZIMBABWE — Zimbabwean authorities swiftly responded to the recent decline of the new gold-backed currency by apprehending illicit moneychangers and shutting down the bank accounts of businesses accused of exclusively dealing in U.S. dollars.
On Monday,
Zimbabwean business owners urged parliamentary committees to request the government to cease arresting moneychangers and reopen the bank accounts of companies accused of only accepting foreign currency.
“This is an inception process of a monetary policy shift,
” said Sekai Kuvarika, CEO of the Confederation of Zimbabwe Industries. “So, let’s give ourselves time. Let’s give the market time. Let’s give the policymakers time to iterate how the policy is going to work in our markets. But we definitely do not support that we accompany our policies with the police.”
Last week,
police arrested several individuals allegedly fueling the black market, where Zimbabwe’s new currency, the ZiG, introduced earlier this month, is trading at around 20 ZiG per U.S. dollar. The government’s official exchange rate is 13 ZiG to a dollar.
Owen Mavengere from the Institute of Chartered Accountants of Zimbabwe stated that arresting moneychangers causes panic. “The parallel market and those dealers in the streets are a symptom of the problem,” Mavengere said. “Sending the police doesn’t inspire confidence. We should handle the root cause and use a soft approach.”
Mavengere emphasized that the government and government-related services should be the first to transition from the U.S. dollar. “There must be a deliberate effort to make sure that the government starts to take the ZiG,” he said.
For now,
the government has stated that commodities like fuel and import duties will continue to be paid in U.S. dollars.
Parliament had summoned Finance Minister Mthuli Ncube and Reserve Bank of Zimbabwe Governor John Mushayavanhu to explain the ZiG currency rollout, but neither attended for unspecified reasons.
Last week,
Mushayavanhu announced a shift in the central bank’s policies, vowing to restore confidence in an institution that has struggled to stabilize the nation’s currency.
Ngonidzashe Mudekunye,
chairman of Parliament’s Industry and Commerce Committee, expressed his satisfaction hearing from business owners about the new currency. “We want to get feedback regarding the new policy, whether it’s working,
whether the industry has new suggestions that may be helpful,
to ensure that this new monetary policy works. We all want a stable currency. Everyone is crying for it. We got so many views; the market wants a stable currency. This is what we are going to suggest to them.”
The next stage for ZiG — introducing physical notes and coins to the public — is set for April 30.
