Zimbabwe recorded its fourth straight trade monthly surplus in November as Finance Minister Mthuli Ncube’s steps to devalue and stabilize the local currency started showing some positive results for exports.
Shipments rose 20% to US$528.9 million in November, thanks to increased manufacturing and higher gold, tobacco and nickel sales.
The government started regular foreign-currency auctions in June to support the Zimbabwe dollar as part of an economic stabilization program.
That’s placed the local currency on a more even keel, trading at just over 80 Zimbabwe dollars to the greenback since August.
That’s a far cry from 2009 when the previous Zimbabwe dollar was redenominated for a third time in less than three years to get rid of as many as 12 zeros, with inflation at an estimated 500 billion percent.
Zimbabwe scrapped its currency shortly after that, using multiple foreign ones for almost a decade, with the greenback as the main unit of reference. It reintroduced its own dollar in 2019, to be used alongside other money.
“The main reason our exports are improving is the devaluation and stabilizing of the Zimbabwe dollar,” said Ashok Chakravarti, an economics professor at the University of Zimbabwe.
“When we were trading at parity to the U.S. dollar we were very uncompetitive. Industry, especially manufacturing, has responded well to the stabilization program.”- Bloomberg