HomeBusiness DigestMurerwa to devalue dollar

Murerwa to devalue dollar

Shakeman Mugari

THE government will soon devalue the Zimbabwe dollar again in a desperate bid to bail out struggling exporters.

tica, sans-serif”>In an interview with businessdigest this week, the Minister of Finance and Economic Development Herbert Murerwa confirmed that the much-awaited sectoral devaluation for exporters was on its way.

“We agreed that we would quarterly review the exporter’s exchange rate to ensure their continued viability and such a course of action is on its way,” Murerwa said.

“The review is coming soon. It was supposed to have been made in June but we are certainly on our way to fulfilling our mandate in Nerp – that of reviewing the export support scheme. The deal is in conclusion.”

The minister however declined to give dates and the percentage of the devaluation.

Government is always uneasy to discuss issues pertaining to devaluation publicly because President Robert Mugabe will hear none of it.

Murerwa’s predecessor Simba Makoni fell out of favour with his cabinet colleagues after informing them that Zimbabwe desperately needed to devalue the currency to get the economy back on track.

Makoni was immediately reshuffled, paving the way for Murerwa.

Under its National Economic Revival Programme (Nerp) government agreed to administer and review the Exporters Support Scheme on a quarterly basis to maintain competitiveness and sustainability in the export sector.

Government sources this week said documents for the devaluation process had been forwarded to Murerwa and the Reserve Bank of Zimbabwe (RBZ) for consideration.

They said government was likely to devalue by between 80% and 100% to about $1 600:US$1.

“It is unrealistic for government to try to match the parallel market which is currently galloping towards the $3 000 mark,” a source said.

It is reliably understood that government would however only effect a devaluation of between 50% to 70%.

Industry sources said exporters were demanding a 200% devaluation to match the parallel market but the central bank and government were unlikely to curve in to their demands.

The parallel market is hovering between $1 500 and $3 000 to the greenback.

Government under pressure from exporters sent the dollar crashing by 1 400% in February in a bid to quell seething frustration from the business sector.

Exporters who are aggrieved by the current rate also expect government to loosen its grip on the foreign currency remitted by exporting companies to the RBZ.

The Chamber of Mines of Zimbabwe this week confirmed the urgent need for devaluation.

“The mining sector is in urgent need of the devaluation,” an official said. “It’s all in the initial understanding of Nerp.”

Last year annual merchandise exports nose-dived by 10,8%.

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