THE Zimdollar (ZWL$) has devalued by 41,57% to $9,16
against the United States dollar on the official interbank market due to low
forex and market confidence, a month after it was reintroduced, analysts have
said.
On June 24, when authorities scrapped the multiple currency
regime a decade after it was promulgated, the forex rate was US$1:$6,47 when
the quasi currency, the RTGS dollar, was the local currency.
“The lack of confidence is one of the biggest challenges or
deficits we are facing in the market, which will continue to devalue the
Zimbabwe dollar…Yes, we can do some measure of forcing the liquidation of money
into the interbank market on export proceeds, but you cannot do the same on
free funds, as the owners would have to use their money in whichever way they want,”
financial expert Persistence Gwanyanya told NewsDay yesterday.
He said the central bank must ensure sufficient forex
inflows on the interbank market.
“The objectives that the Reserve Bank should be observing
include value preservation and efficient operation on the interbank market. So,
if we achieve the
efficient operation of the market, it means we are going to
have significant flows of money into the interbank market. The amount of
foreign currency that we receive as an economy is almost similar to the foreign
currency we use as an economy, such that a lower exchange rate or a firmer
exchange rate is quite
possible,” he said.
Gwanyanya warned that without confidence, the Zimdollar
would devalue. Comparatively, on the parallel forex market, the Zimdollar
appreciated by 28,57% to $10 from $14 on June 24, the day the local currency
was reintroduced.
According to money traders, the reason why the parallel
forex market rate has appreciated is because traders are largely holding on to
foreign currency following reintroduction of the Zimdollar.
Traders told NewsDay that holding onto the forex is so that
they “wait and see the long term effects” of the reintroduction of the
Zimdollar.
This is why, despite the official and parallel market rates
seemingly converging, the Zimdollar continues to devalue as forex holders’
mistrust in government continues to prevent the free movement of money
estimated to be between US$1,5 billion and US$2 billion.
The Zimdollar was reintroduced to control escalating
parallel market rates, which were being used as a basis for price adjustments. Newsday
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