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Nqobile Bhebhe, Senior Business Reporter

GOVERNMENT has reiterated its commitment at maintaining macro-economic stability, strengthening measures aimed at bringing confidence and eliminating arbitrage opportunities through manipulation of the exchange rate.

In a post cabinet briefing on Tuesday, Information, Publicity and Broadcasting Services Minister Monica Mutsvangwa said the Reserve Bank of Zimbabwe will continue to perform an array of its statutory obligations.

“That the RBZ will continue to perform its statutory functions such as a central bank, which inter alia include banker to Government, lender of last resort, protection of depositors’ deposits, regulation of banks, formulation of monetary policy including administration of frameworks for fixing exchange rates and interest rates,” she said.

“That the foreign currency available will continue to be auctioned, and all winning bids should be settled within two days from the date of the auction in line with internationally accepted practices,” said Minister Mutsvangwa.

According to the RBZ after this week’s auction, a total of US$11.7 million was allotted in the foreign exchange auction platform. At Tuesday’s auction, the main auction was allotted US$10.6 million while the Small and Medium Enterprises (SMEs) got US$1.02 million.

A total of 106 and 68 bids were received from the SMEs and main auction respectively. Minister Mutsvangwa added that the Government will continue to institute and strengthen measures aimed at bringing confidence and stability in the economy and eliminating arbitrage opportunities through manipulation of the exchange rate.

Recently, the Government moved swiftly to curtail money supply growth and taming rampant parallel market indiscipline, blamed for fueling inflation and exchange rate volatility.

Besides increasing lending rates to 200 percent, introduction of the willing buyer willing seller forex platform and adoption of the “value for money” process, the Government has managed to curb forward pricing tendencies and abuse of tender processes by public suppliers.

On price stability Minister Mutsvangwa said Cabinet agreed that the tripartite partners should work towards conclusion of a social contract or pact to help promote the stabilisation of the economy.

“Social contract should be the tool for moderating increases in prices of goods and services as well as restraining increases in salaries and wages to counter inflationary measures,” said Minister Mutsvangwa.