Finance Minister Professor Mthuli Ncube is now putting measures that persuade the use of the local currency amid indications that the Zimbabwean dollar is heading for doom.
The Minister, on Friday last week, allowed the payment of mining royalties and importation duty for vehicles to be paid 50% in local currency against the 100% USD costs.
“All domestic taxes due from exporters on their export receipts are now payable in both foreign and local currency in direct proportion to the approved export retention levels,” Ncube said.
“These measures reflect Government’s commitment to promote the wider use of the Zimbabwe Dollar and to continuously strengthen the economy so as to build long-lasting macro-economic stability.”
Ncube put in persuasive measures at a time when analysts have been predicting the fall of the local currency.
The local currency which has been losing value against the United States dollar is now trading at US1: 361 ZWL from 1:200 traded at the black market by December 2021.
Due to inflation which was at 60.6% in January 2022, eroding the country’s legal tender, Zimbabweans have lost trust in the local currency.
At a seminar in Harare, Nigel Chanakira asked 100 chief executives if they were willing to use the local currency only 1 person indicated positively towards the legal tender whilst the rest rejected the local currency.
Zimbabwean authorities have however been adamant and argue that the Zimbabwean dollar is not heading for doom.
Finance Minister argues that the restoration of domestic and export competitiveness through the introduction of the Zimbabwe dollar has seen rapid gains being made in stabilizing the current account, which has also been boosted by increased international remittances, enhanced export performance, and notable import substitution effects.
“Consistent implementation of the monetary targeting framework by the Reserve Bank of Zimbabwe dollar, has also been boosted by increased international remittances, enhanced export performance and notable import substitution effects,” Ncube said.
