HARARE – President Emmerson Mnangagwa has attributed the ongoing decline of the Zimbabwean Dollar (ZWG) to speculative tendencies in parallel market activities.
In his State of the Nation Address (SONA) on Wednesday, Mnangagwa stated the need for corrective measures to safeguard Zimbabweans from economic disruptions.
“Our country’s banking sector is on sound footing, with sufficient capital and liquidity buffers, while profitability, asset quality and liquidity matrix have also remained stable,” Mnangagwa stated.
However, we note with concern the resurgence of parallel market activities driven by speculative tendencies. Corrective measures are being instituted to protect all Zimbabweans from economic disruptions.”
The Zimbabwean dollar has faced significant volatility in recent months, with its value dropping substantially against the US dollar.
The Zimbabwean government introduced the ZWG currency on April 5 after the ZWL currency had lost more than 85% in value.
The ZWG, however, is already losing value, gradually officially trading at ZWG 24,88 : US$1. On the black market, the embattled gold-backed currency is trading at around ZWG 45: US$1.
The ZWG, which was devalued by 43% by the central bank last week, remains under pressure. According to renowned American economist Steve Hanke, “Since its adoption on April 8th, the ZiG has depreciated by a staggering 83% against the USD.”
Zimbabwe is facing a severe economic downturn worsened by the El Niño induced drought and skyrocketing inflation.
Mnangagwa announced that the roadmap for crafting the National Development Strategy 2 was in place and urged the Parliament to support the related processes.
He added that his government had set aside 50% of royalties for building reserves, and foreign currency inflows from exports had increased from US$7 billion in 2023 to US$8 billion in 2024.
Credit : Nehanda Radio
