- Business
- No Comment
Zimbabwe companies can report in US Dollars, exchange CEO says
By Bloomberg
HARARE: Companies listed on the Zimbabwe Stock Exchange now have the option of preparing their financial statements in US dollars, given the currency’s dominance in the economy, the chief executive officer of the bourse said.
Making the switch would require the approval of directors and shareholders, ZSE CEO Justin Bgoni said Tuesday by text message. “It’s a multi-currency environment, so they can report in US dollars.”
Zimbabwe recently extended the use of the greenback as legal tender until 2030. Authorities said that move provides policy certainty to the market, which has been disrupted by changes to currency regulations in the past. The Zimbabwe dollar was reintroduced in 2019 after a decade-long hiatus, but bouts of instability mean most citizens try to avoid using it for payments.
Companies have had to contend with a volatile exchange rate, along with a widening gap between the official and parallel market value for the currency. The Zimbabwe dollar has weakened 89% on the official market against the US dollar so far this year.
Using US dollars for company earnings will give investors “a much clearer picture of true profitability,” according to Imara Asset Management, a brokerage in Harare that oversees more than $100 million.
“Reporting in Zimbabwe dollars, apart from being meaningless to investors and bankers, can hide a multitude of sins and gives a wrong impression of true profitability,” the brokerage said in an October note.
Zimbabwe’s biggest beverages manufacturer, Delta Corp Ltd., is among companies considering reporting in US dollars. The currency accounts for more than 80% of its revenue, Delta said during a Nov. 10 analyst briefing.