‘Zim forex enough to stabilise rate’
HARARE - The exchange rate of the Zimbabwean dollar against the US dollar will continue to hold steady on the weekly auction market because the country is earning enough forex to support critical imports, the Reserve Bank of Zimbabwe (RBZ) says.
Central bank chief Dr John Mangudya, said the exchange rate has maintained stability since being introduced mid last year, helping maintain price stability, which only saw marginal movements last December and in January this year.
Annual inflation raced to post dollarisation high of 837 percent in August last year after Zimbabwe reintroduced and liberalised the local currency in February, after a decade-long use of the
US dollar anchored multi-currency regime.
Prices and indeed inflation, however, started trending down following the introduction of the auction system in June last year, which brought about sustainable formal forex trading, market led price discovery, predictability and the now prevailing stability. Dr Mangudya attributed the 4.2 to 5.4 percent increase in prices in recent weeks to strong demand ahead of the festive season and general rise in prices globally due to Covid-19 restrictions, which have affected global trade and supply chains.
“We believe the exchange rate will continue to stabilise because the country is receiving adequate foreign currency to meet its needs, that will be the main reason for that.
“We also think that the rate will continue to hold steady if companies submit genuine bids to meet critical foreign currency needs for key imports into the country,” he said.
The auction rate was little changed at the last official trading session on Tuesday, moving 0.84 percent to $83, 329 against the US dollar.
The US$33.7 million allotted to bidders in the main auction set a new record, while the US$2.6 million on the SME auction was marginally below the two highest totals in that auction. – THE HERALD, Zimbabwe.
ZAMBIA experienced massive load shedding last year. The prolonged load shedding hours were exacerbated by the low water levels at Lake Kariba during the 2019/2020 rainy season. The poor rainfall pattern during the above named rainy season led to less generation of hydro power by Zesco, the power utility firm.
The good rains being received in most regions within the country during the current rainy season have ultimately led to the ending of load shedding across the country.
This is according to a recent statement issued by Zesco Senior Corporate Affairs Manager Dr. John Kunda.
Dr. Kunda stated that load shedding across the country ended a couple of weeks ago because of the good rains being received. He also stated that power cuts can be experienced in some areas lasting for at least 30 minutes due to overload on the Zesco system.
However, the ending of load shedding has come at the right time in that the manufacturing sector will benefit as the move will trigger high productivity.
The manufacturing industries will now be able to produce goods and services in high quantities unlike in the past when load shedding was at a peak. In economic terms, high productivity will lead to the creation of more employment opportunities.
People in the informal sector running businesses such as hair salons, barbershops and welding, among others, will equally benefit. This sector is very important in that it caters for many people who are not in the formal sector.
The residents in residential areas will now have access to electricity on a daily basis. Security in this way will be guaranteed. In an event of the prolonged load shedding hours at night, security will be highly compromised and people can be attacked by criminals.
All said and done, the ending of load shedding is a welcome move and it will significantly contribute to the economic wellbeing of the country in that it will trigger high productivity. High productivity will in turn leads to more revenue being generated and channeled to the national treasury through payment of various taxes.