By Alois Vinga

FINANCE Minister Mthuli Ncube navigated a tight patch on Monday as he balanced between the country’s pressing economic needs and the wave of rising inflation brought on by external factors and low levels of confidence in the local currency.

The Treasury boss is currently grappling with mounting inflationary pressures that have been aggravated by the Ukraine/Russia war and has blamed legacy perceptions sparked by past experiences of the Zim$ during the 2008 hyper-inflationary as the main causes of the current challenges.

He insisted that all the economic fundamentals were firmly in place and pointed out that the country had large bank balances in US dollars as well as inflows that did not flow significantly into the economy, which, according to him, are not productive.

“No price discounts for payments made in US dollars will be allowed and the law provides for strict criminal and civil penalties including US dollar fines, suspension or cancellation of trade/business licenses for violators. Among other penalties,” he said.

He said the use of the interbank rate in all economic transactions of this formal rate is now mandated by law, but gives traders the freedom to price their goods in US dollars or Zimbabwean dollars as they see fit. wish without any price control.

Ncube said the government is working hard to prevent fuel prices from crossing the US$2,000 mark by implementing downward revisions to government fuel taxes and releasing fuel from the reserve. fuel strategy.

RELATED:

“Just this week the government has completely abolished the diesel tax, reduced it to zero cents and reduced the gasoline tax significantly,” he said.

Among other measures, Ncube clarified the government’s position on the use of the US dollar, saying it will be used as a negotiable currency for the foreseeable future.

“To eliminate speculation and arbitrage based on this issue, the government has decided to enshrine the multi-currency system and the continued use of the US dollar into law for a period of five years,” he said.

The head of the Treasury has also decided to reduce the price of wheat to millers to 239,360 Zimbabwean dollars per ton after committing to inject 20,000 metric tons of wheat per month which will be sold at a price equivalent to 680 US dollars.

He also announced the immediate release of 7,000 tonnes of maize and the additional release of 27,000 tonnes of maize from the strategic grain reserve to millers at a price of Z$75,000 plus US$90 at the prevailing interbank rate.

“The government of Zimbabwe remains committed to maintaining macro-economic stability and eliminating harmful and destabilizing arbitrage conditions that have permeated the economy to the detriment of all citizens,” he added.