The Zimbabwean dollar has rapidly depreciated over the past two months, leading to significant price rises. The month-on-month inflation rate in June 2023 was 74.5%, gaining 58.8% points on the May 2023 rate of 15.7%. To stabilize and slow this decline in the exchange rate, the authorities have taken a number of steps. These steps just to mention a few are as follows:

• Government will, for the June 2023 Quarterly Payment Date (QPD), require taxpayers to settle 50% of the foreign currency portion of their corporate tax obligations in local currency.
• Taxpayers are compelled to settle such tax obligations exclusively in local currency. Government will, therefore, not accept any payments in USD or any other foreign currency for the portion of corporate income tax due in local currency for the Jun QPD.
• Taxpayers without adequate Zimbabwe dollars to meet the local currency tax obligation should urgently approach the Reserve Bank of Zimbabwe through their banks to facilitate the disposal of their USD holdings in order to access the requisite Zimbabwe dollars.

Surprisingly, banks have been struggling to secure sufficient Zimbabwe dollar funding to purchase more than US$ 1 million at any given time since the introduction of the wholesale auction. This limited access to funds has affected their ability to participate fully in the auction and meet the demands of their clients for foreign currency. This is then supported by the fact that Zimbabwean banks only purchased one-third (US$ 10 million) of the available foreign currency (US$ 30 million) during the Reserve Bank of Zimbabwe`s (RBZ) wholesale foreign currency auction held on the 27th of June 2023.

The recent withdrawal of excess local currency from the market through fiscal and monetary measures contributes to the scarcity of Zimbabwean dollars. Tax obligations being payable in the local currency and raising the bank policy rate from 140% to 150%, has increased demand, compelling US dollar earners to liquidate their foreign currency earnings.

Although, currently there is a scarcity of the local currency in the market as well as banks, there is a positive impact noticed on the Zimbabwean dollar as it has begun to stabilize for the first time in several weeks, after a sharp decline in the local currency had caused inflation to reach triple digits (175.8%).

The Zimbabwean dollar has noticeably gained for the first time this year, giving a positive impact on the policy measures which were taken to stabilize the currency. The RBZ exchange rate gained by 8.7% against the US dollar in a weekly run central bank auction on the 27th of June 2023. It is now trading at ZWL$ 6,326.5877 from ZWL$ 6,926.57 it was trading at as of 20 June 2023. The parallel market rate is currently trading at ZWL$ 8,400 against the US dollar. 

Precise Management and Research Consultancy has the latest salary and benefits survey reports for the Zimbabwean Market.

What to expect :

1. Prevailing Monthly Basic Salaries, Base Salaries, and Total Packages.
2. How companies have implemented and adopted remuneration split models.
3. Tax implications on paying salaries using a blend of USD and RTGS currency.
4. Remuneration structures for blended salaries.
5. Company vehicles with regards to : (a) school fees    (b)  medical aid   (c)  motor vehicles  etc....
6. For a quote of the comprehensive report kindly contact: Jackie Ngunda (+263 717 301 471)  or Email : info@precisemrc.co.zw