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Displaying items by tag: Zimbabwe National Chamber of Commerce (ZNCC)

Friday, 15 March 2019 14:19

Zimbabwe inflation hits 59.39%

Zimbabwe’s inflation rose to a new 10-year high of 59.39 per cent year-on-year in February from 56.9 per cent in January, the statistics agency Zimstats said on Friday.
Zimstats said in Harare that the inflation was pushed by increases in the price of basic goods.
On a monthly basis, prices increased by 1.67 per cent in February, compared to 10.75 per cent in the previous month.
Zimbabwe’s Central Bank Governor, John Mangudya had said on Monday that annual inflation rate should fall to between 10 and 15 per cent by the end of the year.
However, economists said the figure could be higher due to price pressures from the exchange rate and a drought.
Published in News Economy
Zimbabwe’s currency devaluation last week has led to a more realistic exchange rate, yet thin trading implies the new official interbank market isn’t as free as officials suggested.
The central bank announced on Feb. 20 that its quasi-currencies -- bond notes and their electronic equivalent -- would no longer be valued at parity to the dollar and would be traded on an official interbank market.
Since then, the bond notes, now known as RTGS dollars, have weakened to 2.5 against the greenback, while the black market rate has appreciated almost 9 percent to 3.36 per dollar, according to marketwatch.co.zw, a website run by financial analysts in Harare. The tight trading band on the interbank market -- rates have ranged between 2.5001 to 2.5042 this week -- indicates trading isn’t totally free. The RBZ seems to be the only supplier of dollars, with just $7.7 million traded as of Thursday, a person familiar with the matter said.
The gap between Zimbabwe's formal and parallel FX rates is still wide
There’s also been some improvement, again modest, with equities.
The dollar squeeze roiled the stock market, with locals piling into it to hedge against inflation, which is officially 57 percent but may be as high as 270 percent, according to Steve H. Hanke, a professor of applied economics at Johns Hopkins University in Baltimore. That caused foreign investors such as Cape Town-based Allan Gray Ltd. -- which struggle to get their money out of the country because of capital controls -- to write down their holdings to more realistic levels. They measure how out of whack prices are by taking the difference between the Harare and London shares of Old Mutual Ltd., Africa’s largest insurer.
The Harare stock has sunk 18 percent this week to $7.50, which in Zimbabwe’s skewed markets is a sign that the liquidity crisis is easing. It’s now 4.5 times the price of that in London, when converted to dollars, down from 6.3 in January.
Old Mutual shares are 4.5 times more expensive in Zimbabwe than London
Investors won’t be confident the foreign-exchange crisis is over until Zimbabwe’s formal and informal currency rates and the so-called Old Mutual implied rate all converge.
Published in Bank & Finance
Zimbabwe will introduce a new currency in the next 12 months, the country’s Finance Minister said, as a shortage of United States dollars plunges the financial system into disarray, forcing businesses to close and threatening unrest.
The southern African nation abandoned its own hyperinflation-wrecked currency in 2009 at the height of an economic recession, adopting the greenback and other currencies including sterling and the South African rand.
But without enough hard currency to back up the $10 billion of electronic funds trapped in local bank accounts, businesses and civil servants are demanding payment in cash which can be deposited and used to make payments both inside and outside the country.
Mthuli Ncube told a town hall meeting late on Friday that a new local currency would be introduced in less than twelve months.
“On the issue of raising enough foreign currency to introduce the new currency, we are on our way already, give us months, not years,” he said.
Zimbabwe currently has less than two weeks import cover, according to central bank data, and the government has previously said it would only consider launching a new currency if it had at least six months of reserves.
Locals are haunted by memories of the Zimbabwean dollar, which became worthless as hyperinflation spiralled to reach 500 billion% in 2008, the highest rate in the world for a country not at war, wiping out pensions and savings.
A surrogate bond note currency introduced in 2016 to stem dollar shortages has also collapsed in value.
President Emmerson Mnangagwa is under pressure to revive the economy but, in something of a vicious circle, the dollar shortages are undermining efforts to win back foreign investors sidelined under his predecessor Robert Mugabe.
With less than $400 million in actual cash in Zimbabwe according to central bank figures, there are fuel shortages and companies are struggling to import raw materials and equipment, forcing them to buy greenback notes on the black market at a premium of up to 370%.
The Confederation of Zimbabwe Industries has warned some of its members could stop operating at the end of the month due to the dollar crunch.
Zimbabwe’s iconic manufacturer of cooking oil and soap, Olivine Industries said on Saturday it had suspended production and put workers on indefinite leave because it owed foreign suppliers $11 million.
A local associate of global brewing giant Anheuser-Busch Inbev said this week it would invest more than $120 million of dividends and fees trapped in Zimbabwe into the central bank’s savings bonds
Source: Global Market
Published in Bank & Finance
Zimbabwe has invited bids for the state-owned airline as President Emmerson Mnangagwa’s government pushes ahead with a drive to privatise and end state funding to loss-making firms, Air Zimbabwe’s administrator said on Monday.
Air Zimbabwe, which owes foreign and domestic creditors more than $300 million, was in October placed into administration to try and revive its fortunes.
The troubled airline is among dozens of state-owned firms, known locally as parastatals, that are set to be partially or fully privatised in the next nine months as the government seeks to cut its fiscal deficit seen at 11 percent of GDP this year.
Air Zimbabwe administrator, Reggie Saruchera said in a notice published in media on Monday that potential investors should make their bids before November 23 after paying a non-refundable deposit of 20,000 dollars.
Ms Saruchera did not indicate whether investors would be allowed to tender for partial or total shareholding in Air Zimbabwe. He was not immediately reachable for comment.
Only three of Air Zimbabwe’s planes are operational, with another three grounded, which has forced it to abandon international routes.
Published in News Economy
Sunday, 19 August 2018 12:49

Zimbabwe: Inflation rises to 4.29%

Zimbabwe’s annual inflation rate rose 1.38 percent to 4.29 percent in July 2018, latest figures from the Zimbabwe National Statistics Agency (ZImStats) show.

This was a significant upturn from the June 2018 figure of 2.91 percent.

On a monthly basis, the inflation rose 1.03 percentage points to 0.98 percent.

“The month-on-month inflation rate in July 2018 was 0,98 percent gaining 1,03 percentage points on the June 2018 rate of -0,05 percent,” said ZimStats in its monthly update.

Some observers have attributed the quickening inflation to the continuance of the parallel currency market.

Although the Reserve Bank of Zimbabwe (RBZ) has maintained the US dollar-bond note official rate at 1:1, cash shortages have resulted in a thriving black market for physical currency, both bond notes and United States dollar notes.

It is largely expected that the high demand for US dollars by both companies and individuals continues to push up the exchange rate.


Source: Vanguard

Published in News Economy
Monday, 30 November -0001 00:00

Zimbabwe bond notes on Botswana black market

THE Reserve Bank of Zimbabwe (RBZ) claims bond notes are now being sold in Botswana, bringing to four the number of Sadc countries where bond notes are reportedly on sale.

Initially, the central bank had claimed bond notes were being sold in Mozambique, Zambia and South Africa. At the recently-ended three-day Zimbabwe National Chamber of Commerce (ZNCC) annual congress in Victoria Falls last week, RBZ official, Azvinandawa Saburi told guests the central bank would work with the Zimbabwe Revenue Authority (Zimra) to try and stop the sale of bond notes across the border.

"Now, on the issue of bond notes being in Botswana, Zambia, Mozambique and so on, I think, as the RBZ, we are monetary authorities, who have to work with other bodies who have responsibility [at borders]," he said.

"So we will certainly talk to them and advise them on how probably they can handle this issue. On this, I would also want to add this is about the currency, the United States dollar is the most widely used currency. "So everyone in the world, everyone who is exporting and so on, is looking for those United States dollars, which is why people play all these shenanigans.

"But, the bottom line is that we are going to work with the Zimra to say that when people are going out they should not take bond notes." 

So far, RBZ claims, the sale of bond notes is in neighbouring countries' border towns. The sale of bond notes was first confirmed in May in Manga, a town just outside Beira in Mozambique, which is close to the Mutare border.

Last month, Livingstone in Zambia and Park Station in Johannesburg, South Africa were also confirmed as points of sale of bond notes. "Another critical issue arising from this lack of confidence is externalisation of both the United States dollar and bond notes," ZNCC Manicaland vice-president, Kenneth Saruchera said.

"You would be surprised that bond notes are being externalised. In Mutare, if you just get across the border at that trading area in Manga, you will find heaps of bond notes. "Bond notes are very popular with the Mozambicans because they want to use this to shop in Zimbabwe so both the United States dollar and the bond notes are being externalised."

RBZ says there are $160 million worth of bond notes in circulation, with the Afreximbank facility of $200 million backing the surrogate currency expected to be extended. When they were introduced, the central bank governor John Mangudya said bond notes would not be externalised.


Credit: Newsday Zimbabwe

Published in Economy
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