Zimbabwe Plans New Measures to Halt Decline of World's Worst-performing Currency

Zimbabwe plans to announce new measures to halt the decline of the world's worst-performing currency in official and parallel markets, according to the state-controlled Sunday Mail newspaper.

The local dollar weakened by 32% so far this year on the official market, making it the worst-performing currency in the world. It decreased by more than 40% in the parallel market, according to a Bloomberg.

The newspaper reported, citing Finance Minister Mthuli Ncube, that the planned measures may include reforms to improve the performance of a weekly foreign exchange auction run by the central bank. The authorities also plan to increase the supply of US dollars in the market.

“The government will take further fiscal and monetary policy measures which may include redesigning auctions in order to deal with volatility,” the Harare-based weekly newspaper quoted Ncube as saying.

He added: “The government will also work to increase the supply of foreign currencies at a time when demand for them is high.”

The central bank said earlier this month that the weekly auction has provided local companies with more than $4 billion in foreign exchange since it began operating in June 2020.

The Zimbabwean dollar was reintroduced into circulation in 2019 after a ten-year hiatus. The US currency is used in 80% of all economic transactions in the country.

(1 USD = 361.9 ZWD)