Story by Owen Mandovha
INTERVENTIONS instituted to stabilise the local currency are paying off as demand for the Zimbabwe dollar has surged. This comes amid revelations that importers and shippers of goods are struggling to settle customs duty in local currency.
A cocktail of monetary and treasury interventions to reverse the waning fortunes of the Zimbabwe dollar is taking a positive turn on several fronts, including the liberalisation of the interbank market where Tuesday’s results showed that only US$10 million of the US$30 million supplied by the central bank was successfully allotted to banks.
On the other end, shippers and importers are scrambling for the Zimbabwe dollar to settle customs duty as demand for the local currency surges.
Shipping and Forwarding Agents Association of Zimbabwe Chief Executive Officer Mr Washington Dube confirmed the congestion at several ports of entry due to failure to settle duty in local currency.
“Most of our members are encountering challenges to secure the Zimbabwe dollars to settle duties because many of the duties are now denominated in local currency. We, therefore appeal for the provision of options to settle dues in either local or foreign currency,” noted Dube.
However, economic analyst Professor Gift Mugano says while the recent measures have worked, a permanent solution in stabilising the Zimbabwe dollar lies in buttressing local production of goods.
“The need to come up with long-term solutions to currency stability is urgent and one very essential thing is to raise our production levels as a currency to sustain the value of the local currency. If you look at how imports are rising it also signals the increased demand for foreign currency on the back of the open border policy put in place by the Treasury. We, therefore need to take a holistic approach across the border to localise our consumption by reducing imports to permanently support our currency,” said Magano.
The government continues to come up with measures aimed at anchoring currency stability while also ensuring the market is not suffocated with liquidity which is the lifeblood of a fully functioning economy.