Staff Reporter

In a bid to strengthen demand for local currency, President Emmerson Mnangagwa announced a raft of measures meant to preserve value and restore macroeconomic stability.

Speaking in a statement yesterday in Harare, President Mnangagwa highlighted the measures that are expected to boost local currency confidence stating that the currency changeover of 2019 affected the value of bank deposits.

“The currency changeover of 2019 adversely affected the value of bank deposits of the banking public mainly as a result of the depreciation of the exchange rate.

“To address this value erosion, Government has resolved to compensate the loss of value on bank deposits to individuals who had funds in their bank accounts of US$1 000 and below as of end of January 2019.”

President Mnangagwa said that the compensation had begun and will continue, adding that a framework was currently put in place to compensate individuals with bank accounts of up to US$100 000.

He went on to say that Government is proceeding to make available sufficient resources to clear the allotments backlog balance by end of May 2022.

On the current partial dollarization system, President Mnangagwa said that it should continue as the Government`s preferred system of payment and transaction within the domestic economy under a carefully managed de-dollarization process which is aligned to the economic fundamentals.

President Mnangagwa further said that Government was committed to a market determined exchange rate system.

“Government is committed to a market determined exchange rate system. In this regard, the willing-buyer-willing-seller foreign exchange system put in place on 1 April 2022 shall continue to be used as a benchmark for price discovery of the exchange rate and for the smooth operation of the auction system.”

He further mentioned a number of additional measures to strengthen the demand for local currency which includes, Reserve Money Growth, Proportion of taxes payable in local currency, Tax incentives for using local currency, Foreign Currency Cash Withdrawal Levy, Settlement of foreign currency tax obligations in local currency (ZIMRA rate) among others.