Exchange Rate May Hit 1 000 By December - Biti

Citizens Coalition for Change (CCC) vice president and former Finance Minister Tendai Biti, says Reserve Bank of Zimbabwe (RBZ) governor John Mangudya’s monetary policies are inadequate to control inflation.

Speaking in an interview at New Zim TV’s premier weekly show, “The Agenda”,  Biti predicted that the high rate of inflation will drive the exchange rate to a high of US$1: ZW$1 000 by December this year. Biti said:

My suspicion is that the exchange rate will by August stand at US$1 to ZW$400, which is a lot of depreciation.

Very soon the parallel rate will be at US$1 to ZW$500 but they are afraid of that especially in a year before elections, so what they are doing is squeezing the tap for the RTGS dollar by withdrawal limits and closely monitoring corporates’ current accounts to ensure there are no movements to fuel Fourth Street (illegal exchange rate market).

To be very crude by end of the year we will be very close to US$1 to ZW$1000, it is back to 2008.

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Biti accused Finance and Economic Development Minister Mthuli Ncube of burying his head in the sand by insisting that the economy was on a recovery path. He said:

The elephant in the living room is the dual economy that Zimbabwe has, Mthuli is pretending to administer a certain economy, prescribe solutions to a certain economy but the rest of us are in another reality, his is a reality distorted field, a false field.

There is a US dollar economy where most of us live, where shops will not accept anything other than the US dollar, where school fees are paid in US dollars, where fuel is paid for in US dollars, where rentals are in US dollars, where houses are sold in USD and that is the bulk of the economy.

Mangudya and Ncube are in this artificial world of this Zimbabwe dollar economy so when he pronounces the monetary policy he is pronouncing it for this small non-existent economy that is controlled by cartels.

Those who are saying inflation has gone down need to be asked the economy they are measuring, will they be measuring the cash US dollar economy or the artificial, false non-existent Zim dollar economy.

It is a cantankerous economy, someone once called it a casino economy but there are rules in a casino…this is a sewer, in a sewer you cannot measure the extent of the stench, you cannot measure the extent of the flow.

It is a dog’s breakfast but one which many dogs will not touch by a long mile.

More: NewZimbabwe.com