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We're Yet To Discover The Real Exchange Rate - Finance Minister Ncube

We're Yet To Discover The Real Exchange Rate - Finance Minister Ncube

Finance and Economic Development Minister, Professor Mthuli Ncube, believes the country is yet to discover the real price of the Zimbabwe dollar nearly two years after launching the foreign currency auction system.

Zimbabwe introduced the system in June 2020 to address persistent macroeconomic instability from parallel market exchange rate volatility.

Authorities were convinced the auction system would facilitate and expedite proper price discovery, which would, in turn, stabilise the exchange rate and prices of goods and services.

Speaking in an interview on the sidelines of the Insurance industry’s meeting with Treasury last Thursday, Ncube said monetary authorities were still working to refine the auction market in order to discover the true value of the local currency. He said:

The country is in a good position, our current account position has been 4 percent in the positive for the past three years, which means we have more foreign currency inflows than outflows… so I do not understand why we are at this position, we are yet to discover the real exchange rate

You reckon we received SDRs (Special Drawing Rights equivalent to US$968 million from the International Monetary Fund) last year, so all in all we have a total of US$1.3 billion in reserves, so we need to interrogate the situation on the ground and refine the auction system.

Despite huge reserves held by Treasury, ballooning foreign current account balances and strong export receipts, Zimbabwe continues to suffer the impact of a volatile parallel market exchange rate.

The parallel market rate has been trading at a premium to the official exchange rate. A snap survey by The Sunday Mail Business on Thursday last week showed that manufacturers were pegging their prices at an exchange rate of around $240 to US$1.

Authorities and market watchers agree that some formally registered companies resort to buying forex on the parallel market due to:

1). the time it takes to obtain funds from approved auction bids.

2). Shortage of foreign currency which also results in disbursement taking longer than expected. There was a backlog of nearly US$200 million as of December 31, 2021.

Markets analyst Allen Dube said ultimately, the solution to the foreign currency situation was not borrowing but increased production, improved productivity and efficient mobilisation of domestic financial resources.

More: The Sunday Mail

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21 Comments

Boy 5 months ago

Useless Currency


Thula Msindo 5 months ago

Doctor Nostro and Professor Vostro now begining to admit that they are a confused duo running the economy on a trial and error basis 🐒 Hey Wena Dr Nostro, Thula Msindo🦍


King 5 months ago

Gedye gedye 1:1. Vakomana avo vanotamba nevanhu.


Daina 5 months ago

kkkkkk 😍😍😍😍😍😍😍👑👑👑💜💜💜💜

Concerned Citizen 5 months ago

We are led by fools shuwa, educated but confused fools


Jinn 5 months ago

I meant there are fools and E D iots occupying high offices up there.

Jinn 5 months ago

There are fools and ****s occupying high office up there

ed supporter 5 months ago

fambai vakomana, tohwina futy 2023


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Mface WaFadzai Mahere 5 months ago

haiwawo


Mutadza 5 months ago

18 million people being led into a dungeon by a blind man


Sir Denzel 5 months ago

kkkkk

Sepu Raized 5 months ago

So when are we to know? 🙆🙆🙆🤒🤒


Chapwititi Kestombela 5 months ago

A whole professor not knowing the real exchange rate of the currency he is presiding over 🤣🤣🤣🤣🤣. What more do we need to be told guys when someone we all look up to has no idea 🤔. A bunch of failures for sure, that is who you are in your entirety. It's so laughable 🤣🤣🤣🤣🤣🤣🤣🤣


Jinx 5 months ago

Exchange rate riri mu black market, Jesus, these guys are being deliberately ignorant and naive


Ngwarati 5 months ago

Alas! my dear Lord.


Bigboy 5 months ago

Bush economics dzevakomana ava dzenharo unotoshaya kuti vakafundira pasi pemuti uye unonzi mu**** here or pasi peuriri chaihwo


Mutadza 5 months ago

We are yet to discover the real meaning of SURPLUS


mukanya 5 months ago

mahumbwe ega ega atinoitirwa nevarume vakuru.


VaZhou 5 months ago

If you don't know the actual rate of your currency then what are you doing in that office.
That's gross amount of incompetence. Why shouldn't you step down.


Rasta 5 months ago

tikutongwa nembavha coz hapana asi kuziva pane rate
pamberi nekuvotera shanduko
#Registertovote
vota mwana wevhu vota



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