The Zimbabwe dollar fell by 21% this week on the official market, a drop that leaves the currency 91% weaker than it was this time last year, reported newZWire.
The Zim dollar traded at ZWL$8 240 per US dollar on Thursday, down from ZWL$6 467 earlier this week, according to Reserve Bank of Zimbabwe (RBZ) data.
This means that the official rate is now more than 91% down over the past year on both the official and black markets.
The Zim dollar started 2023 at ZWL$705 to the USD on the official market and around Z$1 000 at the black market.
Persistence Gwanyanya, a member of RBZ’s monetary committee, was cited by Bloomberg as saying authorities are trying to narrow a widening gap between the formal rate and the street rate.
He said authorities see a gap of 10% to 20% between the official and unofficial exchange rates as acceptable.
Gwanyanya said the depreciation of the Zim dollar was a result of a softening of global commodity prices and the end of tobacco sales, which have slowed US dollar inflows into the economy. He said:
Even this quarter, our situation will not have got to normal. We will need to manage the demand side, that is deal with the demand for forex and judiciously allocate resources.
Gwanyanya said that with the recent depreciation, the “equilibrium has been disturbed” as the gap between official and unofficial markets exceeds the 10% to 20% range set by authorities. He added:
We will now be seized with re-establishing the equilibrium.
Currently, businesses are allowed to charge prices within a 10% margin of the official exchange rate.
In a policy paper to the Government, the Confederation of Zimbabwe Industries (CZI) proposed that they be allowed to set prices at 20% below the market exchange rate.
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