FINANCE Minister, Mthuli Ncube says citizens must not be afraid of another ZWG volatility wave since the country currently has matching local currency and United States dollar balances.
Between August and September 2024, Zimbabwe experienced rapid exchange rate depreciation, which saw the official rate at a premium of US$1:ZWG13,80 being left far behind by the parallel market rate which went up in excess of US$1:ZWG30.
The developments forced retailers to effectively reject the local currency in favor of the greenback. However, prices of most basic commodities have since cooled off following the implementation of a raft of measures aiming at restoring stability.
Speaking to NewZimbabwe.com Thursday on the sidelines of the Women’s Prosperity Conference, Ncube said there should not be worries since the books at Treasury have balanced.
“At the current exchange rate of US$1: ZWG25 what happens is that currently we have enough reserves to cover the entire ZWG deposits in our banking sector.
“The local currency deposits are ZWG10 billion and the value of reserves are US$425 million worth of reserves. Calculating this at an exchange rate of 25 also amounts to ZWG10 billion,” said the finance minister.
Ncube maintained the country has more than adequate cover for ZWG hence there is no reason, whatsoever, for the exchange rate to come under pressure.
“That’s what we want to assure the Zimbabweans on. The Reserve Bank of Zimbabwe (RBZ) also raised interest rates so all that are used really to remove the speculative demand for foreign currency.
“Also, raising the reserve requirement does the same. It just increases the cost for lenders to block speculative borrowing. All these measures are redesigned to strengthen our currency,” Ncube added.
