Treasury announces additional ZW$ stabilization measures

Business Reporter

FINANCE Minister Mthuli Ncube Monday night moved to enact fresh economic measures ordering the liquidation of all the foreign currency earned through exports which remain unused for a period of 90 days among other measures.

Earlier this month, Ncube moved to address macro-economic instability by lifting all restrictions on importation of basic goods while exempting all proceeds from domestic sales in foreign currency from the 15% surrender requirement.

External loans to the government will also be transferred from the Reserve Bank of Zimbabwe to the Treasury.

Some of the economic measures include, enhancing the Foreign Exchange Auction System, creating a supportive interest rate environment, and promoting the use of the domestic currency by government agencies.

Releasing another fresh set of measures Monday night, Ncube ordered the liquidation of export proceeds earned from exports as a strategy to push holders of huge idle US$ deposits to circulate their money into the economy and avoid artificial shortages.

“All export proceeds that remain unutilised after 90 days will be liquidated onto the interbank market. The weekly auction will be limited to a maximum of US$5million.

“As from 1 June 2023, winning bids at the auction will be paid within 24 hours of the award,” he said.

All manufacturers selling general goods such as cement, milk, soft drinks for the export market, were ordered to charge Value Added Tax which is refundable by Zimbabwe Revenue Authority (ZIMRA) after exporting.

Government also committed to continue to sterilise excess liquidity already injected into the economy through issuance of Treasury Bills, while charging the Reserve Bank Zimbabwe (RBZ) to sterilise excess liquidity through appropriate monetary policy tools.

Ncube also tabled plans to strictly monitor illicit activities like the externalisation of funds from Zimbabwe

“With regards to externalisation of funds and transfer pricing, the government will strengthen surveillance and monitoring, complemented by a robust foreign currency payment system and information sharing system between financial institutions and ZIMRA.

“Government will continue to review civil servants salaries and allowances in line with the above developments and policy measures, including increasing the threshold of the local currency IMT tax,” added Ncube.