‘Dollar availability to improve this year’

Source: ‘Dollar availability to improve this year’ | Newsday (Business)

THE availability of the United States dollars in the country could improve in 2018 although cash shortages are expected to continue, according to a new survey by the Investments Professionals Association of Zimbabwe (Ipaz).


Findings from the Ipaz survey, conducted this month, found that 70% of the analysts contacted indicated that the United States dollar cash availability (including nostro) would improve this year, although shortages would persist.

“Confidence is improving, but because we have a huge deficit already, shortages could still persist even when currency flight reduces and new inflows start trickling in,” one respondent said.

Analysts noted that investors are still sceptical and were closely monitoring developments in Zimbabwe, with the biggest source markets like the United Kingdom, the United States and Europe waiting for elections set to be held this year, before pledging any tangible support.

“There needs to be radical changes to the governance system for there to be a sustained improvement in currency position.
Manufacturing capacity will take time to recover . . .” one analyst said.

Responding to a question on whether there would be a new currency regime soon, 52,63% responded in the affirmative, but cautioned that such a move was most likely to happen after the elections.

However, 42,11% of the surveyed analysts said the United States dollar would be retained even after elections, as government would want to hold onto a more stable currency.

In terms of foreign direct investment (FDI), 55% of the chartered financial analysts and IPAZ members believe more FDI would come through in 2018 and beyond, provided the country holds credible elections.

One of the analysts noted that the international community seems to be warming up to the idea of credible elections, regardless of party politics.

Twenty Ipaz members participated in the survey.

Ipaz is a recently established association of chartered financial analysts charterholders in the country and those in other countries, but with Zimbabwean links.