Newsday reports that the warning by the Bankers Association
(BAZ) was contained in a leaked internal document with issues that were
discussed when its constituents met RBZ governor John Mushayavanhu on Tuesday
this week.
“If market conditions remain unfavourable, such as high
inflation, low investor confidence or trade imbalances, the ZiG will depreciate
rapidly. This can lead to higher costs for imports and inflationary pressures
on goods priced in foreign currency. There’s a need to ensure sufficient forex
to meet demand. Demand can be limited by minimising creation of local
currency.”
“If the exchange rate weakens significantly, it could lead
to higher prices for imported goods, driving inflation higher in an economy
already struggling with price instability”.
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