HARARE (Reuters) – Zimbabwe’s Treasury has introduced measures to encourage the usage of the native greenback versus the US greenback, in a bid to spice up native unity and rein in rising shopper inflation.
Measures embrace a directive that every one authorities departments acquire charges in native foreign money, the introduction of a 1% tax on all overseas funds and that every one customs duties be payable in native foreign money, on the exception of designated or luxurious items and when an importer chooses to pay in overseas foreign money.
The Treasury may also assume all overseas foreign money liabilities of the Reserve Financial institution of Zimbabwe, Finance Minister Mthuli Ncube mentioned in a Might 29 assertion.
“The federal government will create a debt compensation fund to service different exterior money owed in step with the arrears clearance program. These will likely be financed via new levies and different useful resource mobilization initiatives,” he mentioned. mentioned Ncube.
Zimbabwe legalized the usage of foreign exchange in home transactions in 2020, lower than a 12 months after abandoning dollarization. Economists estimate that 80% of the native financial system is dollarized.
“The idea of exterior obligations by the Treasury and the implementation of non-inflationary financing of liabilities, coupled with the seek for extra sources, will go a protracted strategy to decreasing the expansion of the cash provide and its impression on the depreciation of the alternate charge and rising costs,” Ncube’s assertion mentioned.
However some economists doubted the brand new measures would assist the Zimbabwean greenback, which has weakened by round 70% for the reason that begin of this 12 months because the hole between the official charge and the alternate charge continues to widen.
“They’re doing this to protect the worth of the Zimdollar. Will it work? I say no. It is like utilizing toothpaste if you’ve misplaced your enamel,” mentioned economics professor Present Mugano.
“It will likely be a miracle for us to have the ability to reverse the Zimdollar crash and supply stability.”
Mugano additionally criticized what he known as the federal government’s plan to “loot” exporters’ overseas foreign money accounts, after Ncube mentioned that “all export merchandise that stay unused after 90 days will likely be liquidated on the interbank market”.
