Zimbabwe’s Finance Minister Decries Persistent Parallel Currency Market Amid Strong Economic Fundamentals

by Oluwatosin Alabi

Finance and Investment Promotion Minister Mthuli Ncube has expressed bewilderment over the continued existence of a parallel foreign currency market in Zimbabwe despite what he claims are robust economic fundamentals. The official exchange rate in Zimbabwe stands at ZWL$ 4,712 per US dollar, yet on the streets, the greenback commands prices exceeding ZWL$7,000.

In an exclusive interview with state media, Minister Ncube, who was recently reappointed as the head of the Treasury by President Emmerson Mnangagwa despite a prior electoral setback in Cowdray Park, emphasized the country’s economic strength.

“The existence of the parallel market in Zimbabwe is baffling,” Ncube remarked. “Our fundamentals are strong. We have maintained a current account surplus for the past five years. I don’t recall that happening in Zimbabwe since 1980. Right now, we are on a strong growth trajectory.”

Highlighting recent economic achievements, Ncube pointed to GDP growth rates of 8.5% in 2021 and 6.5% in 2022. He further indicated an optimistic outlook, with an expected GDP growth rate of nearly 6% for 2023.

Zimbabwe’s Finance Minister also underlined the government’s commitment to fiscal responsibility, stating, “We have seen a balanced budget in Zimbabwe since 2019, the last five years. We have implemented a tight monetary policy and maintained positive interest rates from the central bank, ensuring the stability and strength of our currency.”

Ncube additionally cited measures to manage liquidity and curb parallel market activities, including using non-negotiable certificates of deposit by the central bank to lock away liquidity from potential similar market participants.

Ncube expressed his frustration at the persistence of a parallel currency market in Zimbabwe, asserting, “It is baffling that there is still a parallel market and there is still talk of a parallel market. It shouldn’t even exist, and we are doing so well.”

Despite the Finance Minister’s assertions of economic stability and growth, the enduring existence of a parallel currency market in Zimbabwe underscores the country’s financial landscape challenges.

Source: Pindula

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