KEY POINTS
- Zimbabwe’s Finance Minister reassures the public amid Zimdollar’s decline, citing US$10 billion in reserves.
- The government claims foreign currency reserves are at par with local currency balances.
- Authorities urge Zimbabweans not to panic, promising economic stability through solid reserves.
Zimbabwe’s Finance Minister Mthuli Ncube has called for patience as the country’s local currency, the Zimdollar, declined in recent days. He sought to calm the public by informing them that the country has adequate foreign currency reserves to match its ZW$10 billion local currency balance.
Ncube stressed that due to the government’s good economic policies and adequate reserves, the country’s currency will be stabilized and there will be no financial crises.
In the recent weeks the Zimdollar has been declining thus raising questions on the effects that it will have on the inflation rates and the country at large.
But Ncube is optimistic that the country’s US$10 billion reserves will be sufficient to buffer the economy against external shocks and currency fluctuations. He called on the citizens not to be alarmed as the government is still in charge of the situation.
Zimdollar’s decline raises concern
The dropping of the Zimbabwean dollar has created anxiety in the people especially when the country was working towards to improve the standard of the economy after experiencing hyperinflation for some time.
Zimbabweans have watched their local currency decline against major foreign currencies, raising concerns that the economic gains made in the recent past may be reversed.
However, Ncube is confident that the country’s foreign currency reserves are a buffer against such a situation.
He noted that these reserves are now equal to the balance of ZW$ 10 billion in local currency, which he said should be adequate to support the government to defend the Zimdollar and prevent further depreciation.
According to New Zimbabwe, the government has put in place several measures that it has sought to put in place in order to rein in inflation and stabilize the exchange rate.
These are such measures as the prohibition of the use of foreign currency in the domestic economy and the provision of more local currency in the market.
Reserves to stabilize economy
Ncube also pointed at the strong foreign reserves that he said will help Zimbabwe to counter any economic shocks.
He promised that the reserves will be wisely used to balance the payments and to fund important sectors like agriculture, mining and manufacturing.
The above sectors are essential in maintaining the economic growth in Zimbabwe and thus the country must continue on the recovery process.
The Finance Minister’s message comes at a time when the country is concentrating on the reconstruction of its economy and enhancing investors’ confidence.
The government is in consultation with the central bank to ensure that it closely supervises the exchange rates with a view of intervening in the currency market if only it is over flooded.
Again, it is time to be patiently optimistic
Even though the depreciation of the Zimdollar has caused some discomforts Ncube is confident that Zimbabwe will overcome these storms if only the government exercises patience and proper management of the country’s economy.
He urged the citizens to be hopeful for the future as the current reserves position is an indication that the government is serious with the discipline of its finances and the future stability.
He also added that the government is always looking for more ways to boost the economy through fiscal and monetary policies that would help in the stabilization of prices and moderation of inflation.
These have been complemented by efforts to build strong reserves that will ensure that no other economic down turn occurs.
A hopeful outlook
However, given the problems which current economy of Zimbabwe has the Finance Minister’s words are comforting for the further stability.
The government has adequate foreign currency reserves to support the Zimdollar and to avoid further depreciation. People are encouraged to put their faith in the government plans and expect further improvements in economy throughout the coming months.
