A fixed exchange rate is negatively affecting exporters earnings while encourage smuggling of the country’s resources to other jurisdictions, government has been warned.
Since lockdown started, the interbank market exchange rate has been stuck at Zwl 25 against the American dollar (USD) while the parallel market now stands at Zwl 45 to the USD.
This has meant that exporters who are compelled to retain up to 50 percent of their earnings in foreign currency to be paid the remainder in local currency at the interbank rate are being disenfranchised.
The Zimbabwe National Chamber of Commerce (ZNCC) has warned of resources being smuggled outside the country for better earnings.
“Government should move from fixing the exchange rate. Fixing the exchange rate is counterproductive as it weighs on the exporters and the interbank while propping up smuggling of minerals and other export commodities,” it stated.
Market watchers have called for an more liberal exchange rate system at the interbank to ensure it operates efficiently.
“RBZ should move back to a managed float with regular review to prevent widening parallel market premiums. Regular reviews should at least take into account commercial banks input,” Zncc added.
The calls come at a time growers of tobacco are set to bring their commodity to the market with expectations of viable returns favourable to protect the country’s key foreign currency generators.
There has been calls for government to relax the foreign currency retention regulations as they are benefitting government at the expense of exporters.
This has led to most small scale miners selling their mineral output on the parallel market with better returns.
