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Mthuli Ncube says there is no shortage of foreign currency in Zimbabwe

Finance and Economic Development Minister Mthuli Ncube has claimed Zimbabwe has no shortage of foreign currency, but rather a problem of allocating it through formal systems, now being addressed by measures that include the auction system.

Finance Minister Mthuli Ncube
Finance Minister Mthuli Ncube

Ncube was speaking during a meeting of the Mashonaland West Zanu PF Provincial Coordinating Committee in Chinhoyi on Saturday.

He said while the nation was moving towards economic transformations through its key sectors including farming, mining, ICT and tourism, the stability of the local currency and more foreign currency inflows would eradicate some anomalies existing in the retail and financial sectors.

“We don’t have any shortage of foreign currency as a country. But we just have a shortage of foreign currency through the formal channels. This is, however, what we are fixing through the auction system and new more favourable fundamentals to address the economic challenges.

“As a nation, we were worried and had envisaged a drop in remittances by as much as 10 percent. But God surprised: our remittances are actually up 30 percent. So we have enough foreign currency which means we just have an allocation problem. But we are also fixing that,” Ncube said.

In June, the Reserve Bank of Zimbabwe (RBZ) replaced the interbank market with weekly foreign exchange auctions to determine the Zimbabwe dollar exchange rate.

With the new system, government aimed to the rebuild market confidence, improve access to foreign currency for companies, stabilise the exchange rate and prices.

The Ministry says the Tuesday auctions are aimed at selling foreign currency retained by exporters, which must either be used or sold within 30 days, at the discretion of the exporter or be subject to compulsory sale after 30 days.