HARARE (Reuters) – Zimbabwe’s treasury has introduced measures to encourage the usage of the native greenback versus the U.S. greenback, in a bid to spice up the native unit and tame rising shopper inflation.

The measures embrace a directive that every one authorities departments accumulate charges within the native foreign money, the introduction of a 1% tax on all overseas funds and that every one customs responsibility be payable in native foreign money, except for designated or luxurious items and the place an importer opts to pay in overseas foreign money.

The Treasury will even assume all overseas foreign money money owed from the Reserve Financial institution of Zimbabwe, Finance Minister Mthuli Ncube stated in a press release dated Could 29.

“Authorities shall create a debt redemption fund to service different exterior liabilities in step with the arrears clearance program. These will likely be funded by way of new levies and different useful resource mobilisation initiatives,” Ncube stated.

Zimbabwe legalized the usage of foreign currency in home transactions in 2020, lower than a 12 months after abandoning dollarisation. Economists estimate that 80% of the native economic system is dollarized.

“The idea of the exterior obligations by Treasury and the implementation of non-inflationary financing of the liabilities, coupled by sourcing of further assets, will go a great distance in decreasing cash provide development and its affect on change price depreciation and costs will increase,” Ncube’s assertion stated.

However some economists doubted the brand new measures would assist the Zimbabwe greenback, which has weakened by about 70% for the reason that starting of this 12 months, with the hole between the official and change charges persevering with to widen.

“They’re doing this to protect the worth of the Zimdollar. Is that this going to work? I say no. That is akin to utilizing toothpaste when you’ve got misplaced your enamel,” economics professor Present Mugano stated.

“Will probably be a miracle for us to have the ability to reverse the crash of the Zimdollar and guarantee stability.”

Mugano additionally criticized what he termed the federal government’s plan to “raid” overseas foreign money accounts of exporters, after Ncube stated that “all export proceeds that stay unutilised after 90 days will likely be liquidated onto the interbank market”.