The oldest brokerage firm in the nation claims that the government of Zimbabwe’s campaign to defend the national currency and fight inflation has expanded the use of the US dollar in the economy.
In the most recent quarterly investment notes of the Hararie Customer, John Legat, CEO of Amara Asset Management, stated that banks are now offering loans in US dollars and that listed companies are making more transactions in the dollar because they are suffering from a decline in Zimbabwean dollars. He also added, “Even the government uses the US dollar for its own payments.
In an effort to reduce the supply of money, the authorities have taken a number of actions since May, including raising the standard interest rate to 200%, issuing gold coins, imposing taxes on capital markets, and halting payments to contractors and government suppliers. These actions have resulted in dry liquidity and succeeded in bringing the official exchange rate of the local currency into line with the parallel price.
According to data from the central bank, dollar transactions on banking platforms and mobile banking services have decreased in size and value by almost half since the end of last year. The government of the South African state has struggled to successfully re-introduce its currency in the economy after abandoning it for more than a decade due to excessive inflation in late 2010.
The national payment system’s whole value amounted to 1.
9 billion dollars from 36 million transactions in September, compared to a monthly average of $ 4. 2 billion from roughly 120 million transactions per month in the previous year.
However, as the US dollar’s share of the economy grows, businesses now have access to enough foreign exchange to buy capital goods without going via a central bank auction, which lessens the trade barriers that other nations previously experienced due to the US dollar’s strength.
The use of US dollars in Zimbabwe has increased as a result of the country’s currency support effort.
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