Zimbabwe’s local currency has made a strong comeback, with the exchange rate against the US dollar firming to $5.395 from $5,739 last week.
This is thanks to the government’s policy interventions, including new rules for import duties and external payment obligations, and introducing a wholesale foreign currency auction.
The Treasury has also directed all government institutions to collect fees and charges in local currency, and 50 percent of corporate tax payments must be made in Zimbabwe dollars. The central bank has raised its bank policy rate to 150 percent from 140 percent.
With $20 million on offer in the latest auction, 11 bids worth $4.3 million were accepted, and $4.1 million was allotted. The market is optimistic that the exchange rate will continue to strengthen in favour of the local currency.