ZIMBABWE Finance and Economic Development Minister Mthuli Ncube is today expected to outline new government measures to tackle the worsening economic crisis with inflation topping 191%.
This puts Zimbabwe’s inflation among the highest in the world.
This comes after President Emmerson Mnangagwa told the national conference of his ruling ZANU-PF party that government would announce new measures to tackle inflation on Saturday.
Mnangagwa highlighted that the increase in prices is quite shocking, and promised to tackle it.
Meanwhile, some of the measures under consideration include providing legal certainty around the continued use of the existing multi-currency regime, to boost confidence in the market.
Treasury is also expected to address the unwillingness by exporters to release export receipts with huge amounts held in nostro accounts and not circulating in the economy.
A proposal has been mulled to legally ensure that exporters cannot permanently hold onto 70%-80% of their foreign exchange earnings.
And to stop speculative borrowing, a member of the central bank’s monetary policy committee (MPC) revealed at the weekend that interest rates would be increased to levels in line with the rate of inflation.
“We have decided to bite the bullet,” the official told Bloomberg News. “Stability will be achieved through an aggressive monetary policy interest rate hike.”
Treasury confirmed the press conference Sunday with Chief Director Communications and Advocacy Clive Mphambela in a statement saying it would be addressed by Prof Ncube with his deputy and ministry permanent secretary also in attendance.
According to renowned economist Steve Hanke Zimbabwe is topping the inflation log table.
He implores the Harare administration to fully dollarise.
“Zimbabwe is in 2nd place in this week’s Hanke’s Currency Watchlist. The Zimbabwean dollar has depreciated against the USD by 96.61% since Jan. 2020.
“It’s time for Zimbabwe to dump the Zim dollar & officially adopt the USD.”
Apparently, the government is on record saying it won’t fully dollarise.
The country has been leading the world’s inflation table, as of June 23, Hanke measured Zimbabwe’s inflation at 377%/year, almost 4 times the official inflation rate of 96.4%/yr.
Zwnews/ New Zimbabwe