Image Credits : zimfocus.net
Emmerson Mnangagwa ,a Zimbabwean President, who replaced longtime leader Robert Mugabe after an army revolution, is trying to fix an economy which was ruined by hyperinflation and a long succession of botched economic interventions.
They made their short-term currency the country’s only lawful tender on Monday, finishing a tenner of dollarization and taking another footstep towards re-establishing the Zimbabwean dollar. The Central bank as well hiked its lending rate overnight to 50% from 15% as a part of a set of measures to guard the RTGS dollar launched in February.
Mthuli Ncube, Finance Minister said that the protest towards full currency restructure is part of our transitional stabilisation programme. This move has been started to re-establish full monetary policy.
But looking forward for economic turnaround is yet to appear, and many Zimbabweans are doubting of Mnangagwa’s promises.
Last month, a staff-monitored programme was granted by the Mnangagwa’s government, with the International Monetary Fund (IMF) whereby the fund will assist Zimbabwe execute logical economic policies. Analysts are doubtful that the latest currency changes will be a quick fix for the deep problems that have unnatural economic growth in the southern African country.
Zimbabwe should fast permit the RTGS dollar to float liberally, allow exporters to sell dollars at the interbank rate rather than surrender them to the central bank, and elevate interest tariff to control inflation, said the IMF.
The RTGS dollar has been striking new low downs on the black market in current days.
Against the U.S. dollar it was trading between 11 and 12 on the unofficial market on Monday versus a level of around 6 on the official interbank market.
Many Zimbabweans criticize that goods and services are still priced in other currencies.
While more than 80% of Zimbabweans earn RTGS dollars, goods ranging from bricks to groceries have their prices attached in U.S. dollars.
Jee-A-Van Der Linde who is an economist at South Africa based NKC African Economics said Zimbabwe has to show results before people are swayed.
Prohibiting the use of currencies such as the South African rand and US dollar could create fear since Zimbabwe did not have bulk foreign-currency reserves to back the RTGS dollar, said Van Der Linde
Nothing was standing in the way of the Zimbabwean central bank printing money as been done in the past, he added.