SENIOR STAFF WRITER
LONG-SUFFERING Zimbabweans can look forward to a decent festive season this year, with Reserve Bank of Zimbabwe (RBZ) governor John Mangudya saying yesterday that the current stability in the prices of goods and services in the country would continue into next year, the Daily News reports.
In an economic update following a recent meeting of the monetary policy committee (MPC), Mangudya also said the availability of more foreign currency on the auction system would guarantee the timely importation of raw materials by business — which historically has struggled at this time of the year to raise funds for the country’s import needs.
This comes as Zimbabwe is beginning to enjoy relative economic stability, following the recent implementation of a raft of measures — including the introduction of the foreign currency auction system in June, which has reined in the once rampant forex parallel market.
“The MPC expects price stability to continue prevailing in the economy during the last quarter of this year mainly on account of the improved operating business environment brought about by the foreign auction system.
“With 16 auctions having been conducted to date, and a total amount of US$291 million having been allotted, the MPC is pleased that the auction has also managed to improve the much needed availability of foreign currency,” he said.
The central bank boss also revealed that authorities had approved an additional funding of $2,5 billion to allow industry to increase production — in a move that is expected to see the country continuing to reduce its imports.
“The funds will be accessed by final beneficiaries through normal banking channels under an arrangement that is consistent with the conservative monetary targeting framework being pursued by the bank.
“Accordingly, banks are encouraged to ensure that repayments by their customers from the existing financing facilities are used to augment the bank’s medium-term financing window,” Mangudya said further.
This comes after Finance minister Mthuli Ncube also said recently that the economy would perform better than expected this year, as it had not been severely affected by the coronavirus pandemic as had been originally forecast.
It also comes as the World Trade Organisation (WTO) has commended the ongoing efforts by authorities to stabilise the country’s currency and economy.
Speaking during a recent online review of Zimbabwe’s trade policies and practices, WTO Trade Policy Review Body chairperson Harald Aspelund applauded the government’s efforts to stabilise the local currency.
“Members commended Zimbabwe’s efforts to stabilise its currency, noting that the forex regime should not act as a disincentive for investors and exporters.
“Accordingly, they welcomed the introduction of a weekly forex auction by the Reserve Bank of Zimbabwe in June 2020, and they sought information regarding further measures to ensure that the forex market operates in an open and transparent manner.
“This could contribute to bringing down inflation from its current high levels, and improving the business environment, in particular for Small to Medium Enterprises (SMEs), and the balance-of-payments.
“Several members called on Zimbabwe to reduce state ownership, to improve the governance of state-owned enterprises, and to further tackle corruption,” Aspelund said.