Harare \u2013 Zimbabwe’s finance minister announced on Wednesday that the country will adopt a “managed float” exchange rate system to slow the drop in the value of its currency and curb runaway inflation.<\/p>\n
The measure is the latest in a string of efforts “to stabilise the exchange rate hence to lower inflation”, finance minister Mthuli Ncube told journalists in the capital, Harare.<\/p>\n
Zimbabwe, which suffered a devastating period of hyperinflation a decade ago, has recently seen a disconcerting return of galloping inflation as the government tries to boost the moribund economy.<\/p>\n
The country abandoned its worthless currency in 2009 to bring an end to the hyperinflation that reached 500 billion percent, but a physical lack of foreign currency was one factor holding back the economy over the past decade, marked by high unemployment and shortages of basic goods.<\/p>\n
In February last year, Zimbabwe reintroduced its local currency and in June banned the use of the US dollar for local transactions.<\/p>\n
Inject forex when necessary<\/p>\n
As Ncube unveiled an electronic trading system he acknowledged that the lack of an effective trading platform had hampered efforts to control the currency as a parallel market had mushroomed.<\/p>\n
“This platform will allow foreign exchange to be traded freely amongst banks and permit a true market exchange rate to be determined,” he said.<\/p>\n
The central bank in future will abandon stringent control of foreign exchange but continue to be a significant player in the market by providing liquidity to stabilise the exchange rate when necessary.<\/p>\n","protected":false},"excerpt":{"rendered":"
Harare \u2013 Zimbabwe’s finance minister announced on Wednesday that the country will adopt a “managed float” exchange rate system to slow the drop in the value of its currency and curb runaway inflation. The measure is the latest in a string of efforts “to stabilise the exchange rate hence to lower inflation”, finance minister Mthuli […]<\/p>\n","protected":false},"author":84,"featured_media":20620,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,7],"tags":[187,91],"class_list":{"0":"post-20619","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-all-news","8":"category-files","9":"tag-forex","10":"tag-harare"},"yoast_head":"\n