Zimbabwe: Government Crafting ‘Permanent Solution’ to Exchange Rate, Price Distortions – Says Mnangagwa

FINANCE deputy minister Kudakwashe David Mnangagwa has said the Treasury is working on what he termed a “permanent solution” to address price and exchange rate distortions.

President Emmerson Mnangagwa at his first cabinet meeting of the year revealed that the central bank and Finance Ministry will soon implement a raft of policies to deal with inflation and local currency which is fast losing value.

The local dollar has remained volatile, despite a series of measures introduced by authorities.

The Finance Deputy Minister told Speaker of Parliament Jacob Mudenda Wednesday during a Question and Answer session that a monetary policy statement would be issued soon.

MP Clemence Chiduwa had asked, “Since the announcement of the 2023-2024 National Budget, we have witnessed the rapid depreciation of the ZWL against the USD and other hard currencies and a general rise on the basic commodities.

“What policies is the Ministry putting in place to ensure that the Zimbabwean dollar is stable and the general prices?”

In his response, Mnangagwa said, “I would not want to pre-empty a monetary policy statement as well as fiscal policy announcements that will be coming, but would acknowledge that the increase in the exchange rates and inflation figures are something that we are fully aware of.

“There are actions that are being taken as far as crafting something that can be a permanent solution. So, I would like to leave it at this juncture without putting the cart before the horse Hon. Speaker.”

Mnangagwa warned retailers rejecting the local currency and only accepting the United States Dollar (USD) that the law would catch up with them.

The ZWL has been substituted by the US dollar in the capital and some areas, by the South African rand amid surging inflation.

Members of Parliament raised concerns regarding point-of-sale machines which were said to be unavailable in most shops.

“If there is any rejection, it would be counted to the law, but you would find that this phenomenon is occurring probably in the informal sector.

“In more formalised shops, you have both the USD and ZWL pricing, but Hon. Speaker, it then comes back to the initial affliction that we have which is the inflation and exchange rate disparities that are creating some of these issues.

“So, again I would like to say that the cocktail of measures that will be coming out will address most, if not all, of these issues,” added the deputy minister.

“May you give us time so that the RBZ and the responsible authorities can draw up the monetary policy. However, what I can tell you is that this is being sorted out.”

A high inflationary environment has greatly affected businesses which are struggling to keep track of the local dollar’s weakness.

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