Dual Currency system to stay – President
Government has reaffirmed that the current partial dollarisation or dual currency system will continue in the short to medium term.
This was part of drastic measures adopted by government to stabilise the economy as announced by President Emmerson Mnangagwa in a statement last night.
The President said, “The current partial dollarisation or dual currency system shall continue as the Government’s preferred system of payment and transaction within the domestic economy under a carefully managed de-dollarisation process which is aligned to the economic fundamentals.”
“Similarly, collection of revenue in foreign currency and subsequent spending of the same shall continue in order to support critical Government programs and projects such as importation of Covid-19 vaccines and syringes, borehole drilling equipment and completion of infrastructure projects, debt service, liquidating legacy foreign currency obligations and other foreign payment commitments,” continued the President.
Additionally, the Government will commit to a market determined exchange rate system as another measure to restore confidence, preserve value and restore macroeconomic stability.
“Government is committed to a market determined exchange rate system. In this regard, the willing buyer willing seller foreign exchange system put in place on April 1, 2022, shall continue to be used as a benchmark for price discovery of the exchange rate and for smooth operation of the auction system. Overtime, the auction rate and the interbank rate established through the willing buyer willing seller will provide the basis for orderly unification of the exchange rate.”
The new measures are in response to rampant indiscipline that has seen a spike in commodity prices due to speculative tendencies by both business and individuals.