Zimbabwe should create super demand for its local currency, central bank governor says | The Insider (11/3/23)
Zimbabwe should create super demand for its local currency to ensure that the economy sustains itself, Reserve Bank of Zimbabwe governor John Mangudya told parliamentarians yesterday.
In his presentation at the pre-budget seminar being held at the new parliament building in Mt Hampden, Mangudya said the super demand will be achieved by compelling all sectors of the economy to settle part of their tax obligations in local currency with no exemptions.
The requirement to pay taxes in Zimbabwe dollar increases its role as a store of value and as a medium of exchange, he said.
Mangudya welcomed the government’s decision to extend the use of multiple currencies to 2030 saying this provides policy consistency.
He told parliamentarians that the central bank was finalising and will publish a de-dollarization roadmap to provide forward guidance to economic agents and markets to enhance certainty and predictability in domestic transactions.
It will also align the foreign currency retention policy to the de-dollarization roadmap.
Indonesia central bank to stabilise exchange rate to cushion price pressures | CNA (11/3/23)
JAKARTA :Bank Indonesia (BI) will strengthen measures to stabilise the rupiah’s exchange rate to mitigate the effects of imported inflation, the country’s finance minister said on Friday.
Sri Mulyani Indrawati made the comment as the chair of Indonesia’s Financial System Stability Committee, which comprises the finance ministry, the central bank, the Financial Services Authority (OJK) and the deposit insurance corporation.
“Going forward, rupiah exchange rate stabilisation measures will be strengthened so that it is in line with its fundamentals and it supports efforts to control imported inflation,” she said at a press conference.
Last month, the central bank unexpectedly raised interest rates by 25 basis points to 6 per cent with an aim to defend the rupiah and mitigate against imported inflation.
The rupiah had been weakening against the U.S. dollar in September and October, falling to its weakest since 2020. However, the Federal Reserve’s decision on Wednesday to keep U.S. rates unchanged has reversed some of the losses.
The rupiah strengthened 0.5 per cent to 15,770 per dollar at 0427 GMT on Friday.
BI Governor Perry Warjiyo told the same press conference that the central bank will use its monetary tools to stabilise the financial markets, with its macroprudential tools to be directed at promoting economic growth.
BI expects inflation to come in around 3 per cent at year-end, or within their target range of 2-4 per cent for 2023, and 2.8 per cent for 2024, the governor said.
Meanwhile, OJK said it has asked financial institutions to regularly monitor their investment portfolios in this volatile environment.
The committee also said their recent stress test showed that the country’s financial sector was “pretty resilient” to face slowdown in the global economy, higher global interest rates and rising geopolitical tensions.
Governor Warjiyo said the test was carried out under several scenarios, including an “extreme” one, though he did not give more details on the parameters used in the test.
“In general, Indonesian financial sector has strong resiliency, with a solid capital cushion and more than enough liquidity,” he said.
The test was conducted after the finance leaders met with President Joko Widodo last month to address the falling rupiah.
Source: Dinar Recaps
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