Zimbabwe: Finance Minister to announce new measures to tackle worsening economic crisis; last interventions reversed after a week

FINANCE Minister Professor Mthuli Ncube is this Monday expected to outline new government measures to tackle the worsening economic crisis with inflation topping 191% – among the highest in the world – while the Zimbabwe dollar has been sliding inexorably against the US green back.

NewZimbabwe.com understands that some of the measures under consideration include providing legal certainty around the continued use of the existing multi-currency regime.

Officials are concerned that the market is not assured that the “system is here to stay for the medium term”; as such a legally guaranteed period may be proposed.

Treasury is also keen to address the reluctance by exporters to release export receipts with huge amounts held in nostro accounts and not circulating in the economy.

A proposal has been mulled to legally ensure that exporters cannot permanently hold onto 70%-80% of their foreign exchange earnings.

Again, and to stop speculative borrowing, a member of the central bank’s monetary policy committee (MPC) revealed at the weekend that interest rates would be increased to levels in line with the rate of inflation.

“We have decided to bite the bullet,” the official told Bloomberg News. “Stability will be achieved through an aggressive monetary policy interest rate hike.”

Treasury confirmed the press conference Sunday with Chief Director Communications and Advocacy Clive Mphambela in a statement saying it would be addressed by Prof Ncube with his deputy and ministry permanent secretary also in attendance.

This comes after President Emmerson Mnangagwa told the national conference of his ruling Zanu PF party that government would announce new measures to tackle inflation on Saturday.

Indicating that ruling party supporters are also getting restive over the increase in the cost of living, the Women’s League told Mnangagwa that “The increase in prices is quite shocking.”

Source: New Zimbabwe

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