The widening exchange rate was not caused by foreign currency shortages in the economy but by inefficiency in distributing that forex in the economy, Reserve Bank of Zimbabwe (RBZ) Deputy Governor, Khuphukile Mlambo has said.
Speaking during a forum on Government taxation and its effects on women in Zimbabwe held in Bulawayo on Friday, Mlambo revealed that the country has received more foreign currency than for example, Tanzania and Ethiopia whose currencies were stable while the local currency has plummeted in value. Said Mlambo:
If you look between January and February this year, we have already received US$980 million in inflows. At the end of 2019, we had received US$6,9 billion in forex inflows and the country has 14 million people.
- - - Buy NetOne, Telecel Airtime on WhatsApp using EcoCash.
Send the word Airtime to +263 714 815 229
No extra charges. - - -
If we compare with other countries such as Tanzania and Ethiopia, I didn’t have 2019 figures for Ethiopia, in 2018, Tanzania earned US$3,6 billion in export revenues, Ethiopia earned US$1,7 billion and that same year Zimbabwe earned US$4,2 billion.
So, how possible is it that Tanzania has less foreign currency but their exchange rate is stable? Ethiopia, which has 150 million people, has US$1,7 billion but the exchange rate is stable.
So, clearly, for us it’s not because we don’t have foreign currency, it’s because we don’t have an efficient way of distributing that foreign currency throughout the whole economy. Therefore, that bit can’t be the one causing the current movement of the exchange rate.
Zimbabwe received US$980 million in foreign currency inflows between January and February 2020, a significant amount that was expected to stabilise exchange rates.
Meanwhile, as of Tuesday, the exchange rate was pegged at US$1: ZWL$42.6 according to ZimRates.com