For most countries, it would be good news for their local currency to bounce back from the worst in the world in the space of a month, but not for Zimbabwe. After a 90% drop this year, the African nation’s dollar has almost halved its value against the US dollar, and in a ‘dollarized’ economy, the expected devaluation is hurting companies that sell goods using excessive exchange rates. Should be further extended over time.
New rules requiring corporate taxes to be paid in local currency sparked the latest market turmoil to hit Zimbabwe. , 150%.
This is Compliment environment The exchange rate from a minimum of 7,143 dollars a few months ago has led companies to ask for time to adjust and sell, but the government will not change course: “Policies are here to stay,” said George Kwamatanga, Secretary for Finance and Economic Development, after emergency measures implemented in May to revalue the currency, banks lending. including prohibition from
Los Black market exchange rates They rose as high as 10,000 Zimbabwean dollars to the dollar in May, when the local unit fell to its lowest level on the official market. The volatility pushed annual inflation above 175% in June and prompted warnings from the International Monetary Fund (IMF) to allow the currency to trade more freely.
Following the liberalization of the foreign exchange market last month, Zimbabwe raised rates and made tax changes, leading to the official delisting of the currency. 4,876 per US dollar This week.
From investing in a pantry to perishables
However, companies’ refusal to use the new exchange rate increases the risk of goods rotting as citizens refrain from buying, Kwamadanga said. “People will go to supermarkets to buy things as a way to get rid of their local dollars: instead of getting two tubes of toothpaste, a person will buy a whole carton. […] Zimbabwe’s savings were in the pantries.”
Zimbabwe will be the next big booster for the dollar The election will be held on August 23, is expected to be close. Analysts are not very optimistic that the rally will continue due to the lack of renewed investment attraction so far due to renewed fears of currency depreciation, currency restrictions and tight liquidity.
