The ZWL: USD rate has been very unstable over the past couple of months after being relatively stable in 2021. The government and independent analysts have failed to agree on why this is the case on multiple occasions. Analysts blame the liberal printing of RTGS dollars to pay contractors by the RBZ as the main reason for the slide in the value of the local currency. Finance Minister Mthuli Ncube, naturally has a different view of the situation altogether.

The Zimbabwe dollar, according to Finance and Economic Development Minister Mthuli Ncube, is in limited supply and its value is being skewed by “economic hitmen.” The Minister made these remarks at the weekly post-Cabinet media conference in Harare on Tuesday while answering questions from the audience. This is what he had to say:

The Zimbabwean dollar is in short supply. If you got 0% growth in the money supply, then this currency is not in abundance, but actually in short supply.

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So, what is driving the exchange rate is speculative behaviour in some of the monopolies.

Claims that the government was creating money to finance infrastructure projects were denied by Ncube, a former Finance Minister who resigned last week. Ncube stated:

The government has taken steps to make sure that in its financing of necessary infrastructure development, it does not contribute to exchange rate volatility, indeed, to inflation acceleration.

We have taken two critical steps. One is to pay contractors using the foreign formula, 50% in US dollars and 50% in Zimbabwe dollars.

We have taken those actions and we have a committee between Treasury and the central bank which is called the liquidity committee, which manages the liquidity situation in the entire economy.