insists there is no going back on the process of de-dollarising the economy
despite the growing use of the US dollar in most transactions, more so in the
currency, Government insists
de-dollarisation is on course, although the market has seen increased use of
the United States dollar.
services in Zimbabwe must now quote prices in both Zimbabwe dollars and US
dollars, but using the standard exchange rate set each week as the weighted
average in the Tuesday weekly foreign currency auctions.
The legal instrument giving effect to this was gazetted on
July 24, 2020 by President Mnangagwa, as an addition to the Exchange Control
(Exclusive Use of Zimbabwe Dollar for Domestic Transactions) Regulations.
Zimbabwe Industries (CZI) said in a research note on June 2020 inflation that
the market remained skeptical about the sustainability of the forex auction
market given the lingering uncertainty over the currency direction.
redollarisation was taking root again in light of the fact the Government
itself was also now paying its workers US dollar allowances while collecting
some levies, taxes and fees in foreign currency.
transactions in the informal sector, fuel sector, payment of wages and salaries
by private sector, pricing by large supermarkets and provision of most private
medical and educational services.
But Dr Mangudya said Zimbabwe was not relapsing into
redollarisation given the bulk of transactions remained in local currency while
an economy, technically, is considered dollarised if the volume of US dollar
transactions exceeded 30 percent.
regarding free forex funds in the economy.
payments as well as some commodity purchases should not be construed as
re-dollarisation,” he said.
and services in foreign currency, which might be a result of either tight
monetary targeting by the central bank or wide spread charging of products in
Government should levy taxes and fees in local currency in order to create
demand for the Zimbabwe dollar. It said tax revenue constituted 97 percent of
total revenue to Treasury.
(PAYE) and income taxes in local currency should go a long way in creating
demand for the local currency as taxes contribute significantly to State
There is also belief from industry players that payment of
Government services in local currency will force holders of the greenback to
offload it on the foreign currency auction trading system.
has traded more than US$100 million, but the bulk of forex is coming from the
US$1,1 billion continue to shun the market, opting instead to trade outside the
to allow them to pay for local expenses in the Zimbabwe dollar.
Zimbabwe appealed to be granted “an option for mining houses to pay local
expenses such as electricity and taxes in local. Herald