Finance deputy minister Clemence Chiduwa told Parliament on
Thursday that government was witnessing a massive switch by Zimbabweans to the
black market to buy United States dollars to hedge against losses.
“What really is driving the black market rate? These are
behavioural legacy issues to say we encountered this in 2008 and we are using
the US dollar as a store of value. The moment someone gets a Zimbabwe dollar,
they immediately change it to US dollar,” Chiduwa said.
“People are saying the moment I get money I should convert
it to US dollars, but because of benchmark pricing it has filtered to pricing models
in the shops where you see that the pricing model is now following the parallel
market rate,” Chiduwa added.
“As a result of that, it is now affecting the livelihoods
of our people. We have said in order to cushion our people as we try to get
long term solutions, we have come up with the payment that we are now giving to
civil servants in US dollars.”
Said Chiduwa: “We are equally worried about the movement in
the exchange rate. We have said before that the movement in the exchange rate,
especially on the parallel market, is not linked to fundamentals.
“You look at government expenditure vis-à-vis the revenue
that we are generating as Treasury. Since November 2018 we have not borrowed
from the central bank. We live within our means. As a government, we are very
clear in terms of where we are going.
“You cannot run a country without a monetary leg. The
proper management of a country in terms of economic management requires both
fiscal and monetary policy.”
President Emmerson Mnangagwa’s government re-introduced the
Zimbabwe dollar in June 2019 after abolishing a multi-currency regime which had
been in place since 2009.
Critics at the time accused the government of rushing the
introduction of the local unit without necessary economic reforms and backing
of foreign currency reserves.
Mnangagwa has been under pressure to dollarise, with
teachers in particular, staying away from work citing incapacitation. Civil
servants are receiving US$175 against their demands for US$540 which they used
to earn in 2018.
There is also disgruntlement in the private sector where
employees are agitating for US dollar salaries.
The Zimbabwe dollar is trading at US$1 to $260 at the black
market and US$1 to $135 on the auction system.
Mnangagwa has said there is no going back to
dedollarisation while Finance minister Mthuli Ncube recently announced a number
of measures to stabilise the local currency. Newsday
0 comments:
Post a Comment