Former Finance Minister Tendai Biti has accused the Reserve bank of Zimbabwe (RBZ) of manipulating the foreign exchange auction system by pouring huge amounts of money into circulation.
Biti, who is Harare East MP and vice president of the MDC Alliance, said the RBZ, in collusion with other government bureaucrats in the Finance Ministry, was under instruction to keep printing cash which has resulted in a distortion of the real value of the local currency.
Speaking on Digital Sunday Express, an online platform that discusses pertinent issues affecting Zimbabwe and brings on board various policymakers, politicians and businesspersons, this past Sunday, Biti queried why there continued to be a big gap between the official and parallel exchange rates. He said:
The RBZ is pouring some money (into circulation and is) essentially rigging the RBZ-administered Foreign Exchange Auction Floor.
… There is a parallel exchange rate of 1:120 and the official exchange rate remains stuck around 1:82 or 1:83.
The exchange rate is distorted.
We are now maintaining a dual currency regime – foreign currency and our local dollar. The two can’t mix like water and oil.
So, you have these huge distortions in the economy.
Biti argued that it was imperative for the government to abandon the dual currency system and fully dollarise.
His comments come when the Zimbabwe dollar has marginally gained ground against the US dollar on the Foreign Exchange Auction in the past two weeks, though there hasn’t been any change on the parallel market.
Biti was appointed Zimbabwe’s Treasury chief in the Government of National Unity (GNU) in early 2009 when the country had just adopted a multi-currency system.