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Farirai Machivenyika–Senior Reporter 

ANALYSTS have commended President Mnangagwa for tackling issues affecting the country head on after he announced a raft of measures on Saturday to deal with the rapid depreciation of the local currency and rising inflation experienced in the past month.

The President announced a battery of measures to promote the use of the Zimbabwe dollar while disincentivising usage of the United States dollar.

Lending by banks to both Government and the private sector was temporarily suspended, while cash withdrawals for amounts above US$1 000 will now attract a 2 percent levy.

The Reserve Bank of Zimbabwe (RBZ) was directed to settle all foreign currency auction system allotments within 14 days to improve confidence in the system and will only be limited to auctioning off the funds it has.

The negative inflation expectations were feeding into further volatility of the Zimbabwe dollar as it created artificial demand for the US dollar, creating a vicious cycle in the process, which had to be broken, according to President Mnangagwa.

Zanu PF Secretary for Information and Publicity Cde Christopher Mutsvangwa said the measures would restore normalcy in the economy.

“The measures announced yesterday (Saturday) will give an opportunity for genuine price discovery (for the exchange rate) and will reward those who work hard instead of speculators,” Cde Mutsvangwa said.

Economic analyst Mr

Mr Persistence Gwanyanya

said it was commendable that the President had personally dealt with the issues affecting the economy. 

“The measures are welcome and timely to instil confidence in the market and deal with an environment that was deteriorating with the currency depreciating and inflation rising.

“We take comfort in the fact that it was the Head of State and Government who came out with these measures,” he said.

Mr Gwanyanya said the decision to stop banks from lending was a measure to reduce growth in the broad money supply that was fuelling inflation and the depreciation of the local currency.

He added that the new taxes on the use of the US dollar was a way of discouraging its use and promoting the local currency.

Another economist, Mr Langton Mabhanga, said the measures announced by the President were what the economy needed.

“I think the measures are bold and decisive and were taken to address the ill-discipline by some actors in the economy. These measures are expected to restore hygiene in the market because of the performance of the Zimbabwe dollar and the state of the economy,” he said.

Mr Mabhanga said the suspension of lending by banks will reduce money supply growth, restore sanity on the auction system and slow down inflation.

“We reiterate that all economies that have delivered did so due to national resolve and Zimbabwe is not an exception,” he said.