Zimbabwe Urged to Improve Fiscal and Monetary Policies for Currency Stability
Challenges in Zimbabwe’s Economy
Zimbabwe is facing challenges in stabilizing its depreciating currency, with the World Bank calling for more predictability in fiscal and monetary policies. Victoria Kwakwa, the World Bank’s Regional Vice President for Eastern and Southern Africa, emphasized the need to move away from the central bank’s questionable financial activities to restore confidence in the economy.
Addressing Currency Depreciation
The Zimbabwean dollar has experienced a significant decline against the U.S. dollar, coupled with high inflation rates. The lack of confidence in the local currency has led to its continuous devaluation, impacting the country’s economic stability. Kwakwa highlighted the importance of building trust among the public to address these monetary challenges.
Efforts to Stabilize the Currency
Authorities in Zimbabwe have been working on measures to stabilize the currency, including potential strategies such as linking the exchange rate to the price of gold. Policy predictability and moving away from non-core financial operations are seen as essential steps in restoring confidence in the economy and the currency.
Debt Arrears Clearance
Zimbabwe is in the process of clearing billions of dollars in debt arrears with international lenders, including the World Bank. This ongoing commitment aims to alleviate the country’s financial burden and pave the way for economic recovery and growth.
Debt Restructuring in Zambia
The recent debt restructuring agreements signed by China and India with Zambia have raised hopes for the country’s economic revival. With official creditors on board, Zambia now has the opportunity to focus on negotiating with commercial creditors to further stabilize its financial situation.
Overall, the efforts to enhance fiscal and monetary policies, clear debt arrears, and secure debt restructuring agreements are crucial steps towards economic stability and growth in Zimbabwe and Zambia.
