Government moves to stabilise money markets

HARARE – The Government has negotiated several foreign currency facilities that are set to ease liquidity challenges in the economy, as well as curb parallel forex market activity, President Mnangagwa said today in his inaugural State of the Nation Address (SONA).

Foreign currency shortages have made it difficult for local industry to import raw materials for use in their production processes, hampering the growth of manufacturing in the country.

US$500m foreign currency facilities negotiated by Government so far, from which it can start drawing down this week, are expected to improve the situation significantly.

“In order to bring sanity in the foreign currency market, my Government through the Reserve Bank of Zimbabwe (RBZ), has negotiated a number of foreign exchange facilities amounting to US$500 million that are intended to meet the growing demand for foreign currency by business and the public in general,” said President Mnangagwa.

“Some of these facilities shall be disbursed this week to meet the expanding demand for foreign currency that continues to be sustained by fiscal imbalances, which my Government has made a great commitment to address.”

On Monday, London-based emerging market fund Gemcorp Group said it had extended a US$250 million loan to Zimbabwe to help the country with essential imports.

According to the RBZ, Zimbabwe’s backlog for foreign payments now exceeds US$600 million.