PRESIDENT Emmerson Mnangagwa Wednesday took yet another bold step after committing to set aside 50% mining royalties to shore up the ZWG currency on the back of a chilling warning issued to parallel market dealers.
He made the announcements in a State of the Nation Address (SONA) to mark the year's second session of the 10th Parliament. The developments come on the back of a public outcry over massive depreciation of the new gold-backed currency which has seen parallel market rates tumbling to ZWG30 against the greenback.
"Government remains committed to backing the currency through setting aside 50% of royalties for building reserves. Foreign currency inflows from exports have increased from US$7 billion in 2023 to US$8 billion in 2024.
"Our country's banking sector is on sound footing, with sufficient capital and liquidity buffers, while profitability, asset quality and liquidity matrix have also remained stable. However, we note with concern the resurgence of parallel market activities driven by speculative tendencies. Corrective measures are being instituted to protect all Zimbabweans from economic disruptions," he said.
Mnangagwa also called upon parliamentarians to throw their full weight behind the embattled local unit which he said is at the core 'of macro-economic stability'.
He ordered all citizens to respect and abide by measures and instruments intended to maintain economic stability and tame inflation.
In the SONA address, measures taken by the Reserve Bank of Zimbabwe allowing for greater flexibility under the willing-buyer willing-seller arrangement and the increased flexibility on the foreign exchange market were confidently hinged on as lasting solutions to further promote effective price discovery and encourage holders of foreign exchange to participate in the willing-buyer willing-seller market.
This is despite several stakeholders from the business community criticising the interventions for posing the risk of complicating an already tough situation.
"Together, let us lay a solid foundation for economic prosperity, peaceful development and freedom from undue external interference," added Mnangagwa.
