FINANCE and Economic Development Minister, Professor Mthuli
Ncube, has expressed confidence that the RTGS dollar will stabilise and gain
value beyond the prevailing market volatility as Government forges ahead with
implementation of fiscal reform measures.
He said the new framework under the Staff Monitored
Programme (SMP) between Government and the International Monetary Fund (IMF)
will help open new foreign financial flows to the economy, assist foreign debt
clearance efforts and create a stable currency environment.
Prof Ncube said he expected the official interbank exchange
rate to converge with the raging parallel market rate soon as the Government
continues to implement prudent fiscal measures that do not fuel the black
market.
“The SMP from IMF has opened doors for immediate foreign
financial inflows to support Cyclone Idai recovery efforts, and help mobilise a
global financial package for arrears clearance, and create a stable currency
for Zimbabwe. The RTGS$ would stabilise and even strengthen,” he posted on his
Twitter account.
In February, the Reserve Bank of Zimbabwe (RBZ) floated the
local reference currency, dubbed RTGS dollar, at 2.5 to one US dollar after
abandoning the 1:1 fixed rate. The rate has steadily gone up to slightly above
three RTGS dollars per US dollar while on the black market the rate is between
4.1 and 5,2 this week. However, Prof Ncube has said Government was maintaining
a tight fiscal regime in order to contain the parallel market.
“It’s early days, we just introduced the new currency
regime a little over a month ago, so it (the new currency) is trying to find
its way, it is trying to find equilibrium; it will get there and close that gap
between the parallel market and the official floating market,” he told
Bloomberg TV in Washington, the United States.
“The (black market) cannot carry on, you know why, because
on the fiscal front things are very tight, because previously the fiscus was a
source of money growth and therefore (creating) weaknesses on the currency and
currency volatility.
“Currently things are very tight, we are running a surplus
for the last four months in terms of primary deficit so we do not expect the
currency to come under pressure, neither is money supply growing. On the
contrary, expect month-to-month inflation to go negative in the next few months
so the currency (rate) cannot run away too far.”
Prof Ncube said foreign currency supply was expected to
increase as the tobacco marketing season progressed.
“We are looking forward to an improved tobacco season, we
earn about a billion dollars from the sale of tobacco globally so we expect
that to stabilise the market over the next few months,” he said.
— Business Chronicle/New Ziana.
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