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*Zimbabwe Dollar Shows Signs Of Stabilising*
https://www.pindula.co.zw/2022/09/15/zimbabwe-dollar-shows-signs-of-stabilising/?article

The Zimbabwe dollar is showing signs of stabilising, with the gap between the official and parallel-market exchange rates closing and inflation easing.

Speaking to Bloomberg by phone, Harare-based economist and a member of the Reserve Bank of Zimbabwe’s monetary policy committee (MPC), Persistence Gwanyanya, said:

_We have basically converged with an acceptable premium between the alternative and interbank rates. The markets are at equilibrium._

The latest foreign exchange weighted average rate announced by the RBZ on Tuesday is Z$604 per dollar, with businesses allowed to add a 10% markup in pricing goods and services.

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This brings it close to the parallel market rate of between Z$650 and Z$800 per greenback.

Since May, the government has unveiled a raft of measures which include issuing gold coins, legalising the use of the US dollar and a brief ban on bank lending in a bid to stabilise the local currency and arrest runaway inflation.

Gwanyanya said with the currency markets stabilising, the central bank now expects businesses to begin cutting prices. He said:

_It is inescapable. The next wave is that of price reductions and that will cement the stability._

Gwanyanya also said the RBZ won’t rush to cut its key interest rate, currently the world’s highest at 200%, as doing so will reverse the gains made so far.

Meanwhile, Lloyd Mlotshwa, who is the head of research at IH Securities, a Harare-based brokerage firm, said it is unclear whether some of the measures imposed to bring the exchange rates in line are sustainable. He said:

_The convergence has been achieved by punitively constricting local-currency liquidity, that is by stopping government contract payments, increasing interest rates to 200% and taxes on capital markets._

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