Zimbabwe Stock Exchange (ZSE) listed firms have applauded Government policy interventions passed in the second quarter, as they said the business environment was more stable in the third quarter.
In their quarterly updates, the companies said, prices were fairly stable as was witnessed by the receding inflation in the quarter under review.
First Mutual Holdings in its nine months trading update to September said; “The operating environment was stable during the third quarter of 2023 following policy intervention measures instituted by the Government to tackle price and exchange rate volatility.
“The measures resulted in stable market conditions though the gap between the official and parallel rates is now increasing. The Bank Policy rate stood at 150 percent as of September 2023 while the official exchange rate, which was at USD1:$5 769 at the beginning of the quarter, closed at USD1:$5 467.”
Leading property developer, Mashonaland Holdings, in its third quarter to September 30, 2023 said, “The Reserve Bank of Zimbabwe (RBZ) exchange rates relatively stabilised during the third quarter pursuant to monetary policy interventions.”
Another property firm, First Mutual Properties, said the operating environment was characterised by increased activity across key economic sectors.
“The downward trend (in inflation) has been due to policy tightening and elevated monitoring of financial transactions by the authorities to contain speculative off-market foreign currency transactions,” the company said.
According to the Total Consumption Poverty Line (TCPL), local currency year-on-year inflation peaked in June 2023 when it registered 394,8 percent but has since receded to 249,7 percent in September 2023.
Third quarter inflation was 139,1 percent from a quarterly inflation movement of 208,4 percent in the second quarter of 2023. According to the July 2023 Monthly Economic Brief issued by the Reserve Bank of Zimbabwe, 82,4 percent of total money supply is in foreign currency indicating the significance of foreign currency transactions in the economy.
Business is giving reference to Treasury’s May 2023 measures meant to encourage the use of the local dollar as opposed to the U.S. dollar, in a bid to boost the local unit and tame rising consumer inflation.
The measures included a directive that all government departments collect fees in the local currency, the introduction of a 1 percent tax on all foreign payments and that all customs duty be payable in local currency, with the exception of designated or luxury goods and where an importer opts to pay in foreign currency.
Mashonaland Holdings also applauded the move to extend the multi-currency regime to 2030 as a progressive policy, which gives business and investors some confidence.
“The government has extended the multicurrency regime to 2030 through Statutory Instrument 218 of 2023. The move is anticipated to improve business confidence in the short term and will assist in promoting lending support to productive sectors of the economy,” they concluded.