Almot Maqolo, Staff Writer 
A LOCAL research firm, Akribos, says transactional dollarisation will likely continue to expand as economic actors try to hedge against currency risk in a high inflationary environment.
This comes as experts have continuously warned that the worsening volatility of the Zimbabwe dollar is creating uncertainty within the economy.
More than three-quarters of domestic spending is now in foreign currency, according to the Zimbabwe Statistics Agency.
Authorities, however, continue to ramp up efforts to promote the use of the domestic unit to regain control over monetary policy and avoid over-reliance on foreign currencies.
“Foreign currency receipts from tobacco exports and increased US dollar salaries for civil servants are also going to increase the pace of transactional dollarisation. In addition, remittances are also expected to continue to cushion a constrained consumer base in Zimbabwe,” Akribos said in its first quarter review.
It said the local currency would continue to depreciate against the US dollar.
“Looking ahead, we expect the local currency to further weaken as a result of the election and public infrastructure spending,” Akribos said.
“In addition, as we head towards the 2023 harmonised elections and even after, any protests, violence or serious inquiries into government conduct have the potential of further destabilising the economy and the ZWL.”
newsdesk@fingaz.co.zw
