Finance and Investment Promotion Minister Mthuli Ncube has said it is baffling that a foreign currency parallel market still exists in Zimbabwe.
The official rate is ZWL$4 712 per US$1 but on the streets, the greenback exchanges hands at above ZWL$7 000.
Most goods and services, including diesel, petrol and liquified petroleum gas, are sold exclusively in foreign currency and this has driven the appetite for the elusive greenback resulting in a thriving parallel market.
But speaking to State media, Ncube, who was reappointed Treasury boss by President Emmerson Mnangagwa despite losing in Cowdray Park, said the country has strong economic fundamentals that discourage the existence of a parallel market. He said:
The existence of the parallel market in Zimbabwe is baffling. Our fundamentals are strong, we have a current account surplus, and we have had that for the last five years.
I don’t remember that happening in Zimbabwe since 1980 and most countries will kill for that. Right now we are on a strong growth trajectory.
We grew at 8.5% in 2021, and 6.5% in 2022, and again we are due to see growth in GDP growth of close to 6% in 2023 and the story continues.
We have seen a balanced budget when other countries have been reeling in deficits, we have seen a balanced budget in Zimbabwe since basically 2019, the last five years. That is what we have done.
We have seen a tight monetary policy, and positive interest rates from the central bank, so all the fundamentals are in place making sure our currency is stable and strong.
We are dealing with liquidity as we should. The central bank is using non-negotiable certificates of deposit with the right tenure to lock away liquidity from those who may seek to use it on the parallel market.
So every piece of policy that is necessary for a stable currency has been put in place and has been instituted.
It is baffling that there is still a parallel market and there is still talk of a parallel market. It shouldn’t even exist, we are doing so well.
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