“The Zimbabwean dollar is in short supply. If you got 0%
growth in the money supply, then this currency is not in abundance, but
actually in short supply. So, what is driving the exchange rate is speculative
behaviour in some of the monopolies,” Ncube said at a post-Cabinet briefing
question-and-answer session.
He made the remarks after the Zimbabwe National Statistical
Agency (ZimStat) last week announced that the country’s year-on-year inflation
had shot to 131,7% up from 96,4% in April.
Former Finance minister Tendai Biti, in an interview with
Alpha Media Holdings’ HStv talk show last week, said government was living
beyond its means, and printing money to fund infrastructure development
projects.
But Ncube rubbished the claims yesterday.
“The government has taken steps to make sure that in its
financing of necessary infrastructure development, it does not contribute to
exchange rate volatility, indeed, on inflation acceleration,” Ncube said.
“We have taken two critical steps. One is to pay
contractors using the foreign formula, 50% in US dollars and 50% in Zimbabwe
dollars.
“We have taken those actions and we have a committee
between Treasury and the central bank which is called the liquidity committee,
which manages the liquidity situation in the entire economy.”
Government has also eased control on the official exchange
rate, allowing it to converge with an interbank rate, but has since spiked to
$308:US$1 as of yesterday. Newsday
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