The investors portal www.proactiveinvestors.co.uk published a relatively optimistic new item about Zimbabwe's economic liberalization, arguing it is proceeding with gusto. "It's not always been an easy process, to be sure, as the widespread unrest related to increased fuel prices bears witness to."
The article noted that President Emerson Mnangagwa "has set out his stall, particularly on inflation, and there is widespread optimism in financial circles that the Reserve Bank of Zimbabwe is going to move towards a transparent currency market. This is seen as key because real-terms inflation remains very high but has until very recently been officially hidden behind a government-backed currency that has been kept at artificial levels."
"Moves to address this issue with the creation of a newer freer-floating currency exchangeable on foreign markets have gone some way towards mitigating the problem, but the feeling is there is still some reserve bank intervention going on in the background, perhaps to allow the new currency a slower and gentler move towards the true market rate."
"This currency change is also related to the demise of the export credit incentive scheme, since the government has now created, in theory, its own currency capable of securing foreign exchange reserves, and no longer needs to rely on gold sales to secure US dollars."
"The resolution of the currency complexities in Zimbabwe would be more than welcome, especially to workers at the operations like Caledonia's Blanket mine. By law Caledonia has had to pay its workers at the official rate, but with the twin currencies trading well off their official parity on the black market, that meant real-terms pay was cut to 14 cents in the dollar. The disparity is no longer that extreme, but there is still some way to go."
Still, Mark Learmonth, CEO of Caledonia Mining Corporation, a gold miner with interests in Zimbabwe, expressed cautious optimism "that progress will be made. The company has met with Mr. Mnangagwa and with the governor of the reserve bank and sees, he says, 'a genuine attempt by the Zimbabwean government to liberalize the economy.' He points out that for the last four months the government has been running a surplus, which is virtually unheard of in the recent economic history of Zimbabwe.""'We are comfortable that there is a genuine attempt to open up the country for business. We're very clear on that,'" Proactiveinvestors quoted Learmonth.