In a quest to stabilize the exchange rate and arrest runaway inflation, the Minister of Finance and Economic Development, Hon. Prof. Mthuli Ncube issued a Press Statement on 11 March 2020 with a cocktail of measures which including:
- Establishment of the Task Force to meet once a week to review the conditions obtaining in the market.
- Foreign exchange management and introduction of a managed floating exchange rate system – an electronic forex trading platform based on the Reuters system is being immediately put in place
- Foreign exchange management and introduction of a managed floating exchange rate.
- Commercial banks to join and become the “Market Makers”
- Bureaux will be market takers.
- Bureaux are to be immediately liberalised as per RBZ rules which are ready for implementation. There will be no limit on Bureaux ability to finance importers and shall have a minimum float of USD 20,000.
- Bureaux can use excess USD to purchase ZWL cash from RBZ
- MINISTRY OF FINANCE – Will be required to project revenue and expenditure for the full financial year and announce its TB issuance calendar, if such financing is required.
- RESERVE BANK OF ZIMBABWE – introduce minimum interest rates on all deposits, including trust accounts underpinning mobile banking wallets, to incentivize savings and encourage holding of the domestic currency.
- MOP up excess liquidity being held by corporates and other large holders of ZWL in the banking system by introducing short term OMO corporate bills with attractive features.
- MOBILE MONEY PLATFORMS – The RBZ is, therefore, currently reviewing all the regulations covering such platforms. In particular, it is intended to place limits on daily bulk payer transactions.
Major predicament to ponder, is whether the currency stabilization will have effects in IFRS application and going concern status of businesses and any NOCLAR issues?