Zimbabwe: Consider Redollarising the Economy, Biti Says to Govt

Harare East legislator and former finance minister Tendai Biti has called on government to both accept the country's economy has dollarised by default and to liberalise the exchange rate following continued price distortions in the country.

He was speaking in parliament Tuesday after he took the floor on a matter of urgent national importance.

Said the opposition lawmaker, "Despite the introduction of a mono-currency through Statutory Instrument (SI) 33 of 2019 and SI 142 of 2019, it is clear that the economy has largely become an informal United States Dollar (USD) economy.

"It is also clear that citizens are being subjected to a regime of multiple prices.

"So, you find goods indexed in local Zimbabwean dollars but also indexed in USD."

Biti said the obtaining disparities in the official and parallel market value of the US dollar have seen some unscrupulous behaviour among retailers pricing their goods at black market rates.

Supermarkets, on the other hand, Biti said, offer discounted rates based on the official auction rate which is 32% or 30% lower than the parallel market rate.

"So, they are having a double dip honourable Speaker Sir," he said.

"Businesses are indexing their prices at the official parallel rate, yet they are collecting money from the citizens and discount it at the official auction rate.

"This increases distortions in the economy.

"I appeal to authorities, in particular the Ministry of Finance and Economic Development to do either of the two following things; to acknowledge the informal redollarisation of the economy that has taken place and secondly, just liberalise the exchange rate so that we do not have the fixed auction rate which has been fixed at US$1 is to Z$82 for the past six months."

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