The Reserve Bank of Zimbabwe has devalued the local currency which is now trading at 24.39 against the United States dollar following the further liberalisation of the foreign exchange market in response to the resurgence of exchange rate pressures.
In a statement, Reserve Bank of Zimbabwe Governor, Dr John Mushayavanhu said the bank has with immediate effect reviewed upwards the bank policy rate from 15 percent and 20 percent to 35 percent.
It also increased and standardised statutory reserve requirements for both demand and call deposits on local and foreign currency from 15 percent and 20 percent to 35 percent.
Individuals will be restricted to carry a maximum not exceeding US$2 000 out of the country from US$10 000.
The bank also noted that the measures will contain any exchange rate risks, while keeping prices of goods and services in check.
A storm of outrage has erupted across Zimbabwe following the Reserve Bank of Zimbabwe’s (RBZ) drastic devaluation of the Zimbabwe Gold (ZiG) currency by 44%.
Civil society groups, economists, and the general public have taken to social media, denouncing the impact of the devaluation on everyday life, with many accusing the central bank and the government of exacerbating economic hardships.
The Amalgamated Rural Teachers Union of Zimbabwe (ARTUZ) was quick to criticize the government, calling for immediate salary adjustments in line with the devaluation.
“Mthuli Ncube and the employing authorities should not wait to be told that since the ZiG has officially been devalued by 44%, the salary component in ZiG must automatically be adjusted. The stability of this Republic rests on the shoulders of workers,” ARTUZ tweeted.
Another critic, @Vahombe07, highlighted the dire consequences for civil servants and pensioners.
“If a civil servant earned 5,000 ZiG, the value of that money is now effectively halved. School fees and prices of basic goods are set to skyrocket by almost 100% to counterbalance the devaluation.”
Prisca Mutema, an outspoken commentator, noted that this devaluation has further eroded trust in the government and its monetary policies. “The black market players have received a go-ahead from the government to bury the ZiG,” she warned, predicting inflation rates would rise sharply by the end of the year.
Mutema added that the government’s poor monetary policies would lead to a swift devaluation of the currency, forecasting the ZiG would plummet further by December.
