THE Reserve Bank of Zimbabwe (RBZ) has attributed the persistent foreign currency shortages to adverse terms of trade whereby imports supersede exports, resulting in foreign currency drain across the country.
Speaking during a debate on the economy in Bulawayo, RBZ director of economic research Simon Nyarota said as long as there are wide disparities between import and export revenue, liquidity will persist.
Nyarota said it was not an option to adopt the rand despite South Africa being the country’s largest trade partner. He said this is because of the fact that for the rand to be adopted, there are a lot of considerations such as external and internal shocks between the two countries.
“Major sources of liquidity or currency is exports. This is one of the major sources of the Province that we have. Once we are dollarised and then have got adverse terms of trade then you are at trouble, you are bound to have shortage of liquidity status,” Nyarota said.
Nyarota attributed the shortage of foreign currency to the adverse of terms of trade.
“There is a shortage of foreign currency because of the adverse of terms of trade where by imports are much more than exports there is a drain of foreign currency and also exports are not performing well and as a result we are bound to have some currency shortage,” he added.
Nyarota also cited a lot of challenges associated with the adoption of the rand.
“When we are looking at trade and all the proponents who are saying that we should use the rand they are looking at trade figures saying we export 60 percent of our goods to South Africa and import 40 percent of our goods from South Africa so we should use the rand and on the surface of it, it looks okay but if we look deeper there could be some challenges,” said Nyarota
“There is need need to look at the nature of shocks affecting the countries , looking at Zimbabwe and South Africa, if there is an external shock that affects the region we consider the response between the two countries,” Nyarota said
“If the response is the same, then we have the rand and we could be moving together,” he said.
The introduction of bond notes has not eased the deep-seated cash shortages bedevilling the country as meandering queues of depositors in need of cash continue outside banking halls.