Zimbabwe’s battered economy has continued to struggle, heightening an uncertain operating environment for companies. The government insists, though, that opportunists are driving down the Zimbabwe dollar currency through speculative currency trading, hence the raft of new finance measures announced Monday.
"Banks will be guided by the apex bank policy rate. While we expected that the interest rate would have to go up, the magnitude is overboard and reflects that this kind of aggressiveness is out of desperation to contain the inflation and monetary sector mess," a finance director with a Zimbabwean finance institution said Tuesday.
However, fewer economic players have been moved by the latest measures introduced by the Reserve Bank of Zimbabwe and Treasury. Confidence is still problematic and efforts to try to force business to adopt the problematic official exchange rate – it trails the much more popular street rate by multiples – have stoked up worries of price controls.
"The willing-buyer-willing-seller principle is likely to be ineffective because of the lack of public confidence in the banking sector," the Fight Inequality Alliance of Zimbabwe said. The labour union is now urging its affiliate unions to"start negotiating for wages and salaries in US dollar as the situation has become untenable" for the majority of workers. Business leaders in Zimbabwe told Fin24 that they were consulting their members on a response to the new policy measures.
CyrilRamaphosa look and learn! South Africa next