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Temba Mliswa calls for return of the US Dollar

by Mandla Ndlovu
26 Apr 2022 at 10:24hrs | Views
Norton Member of Parliament Temba Mliswa says the introduction of the United States Dollar as a single currency is the best salvation to the revival of Zimbabwe's economy.

In a Twitter thread on Tuesday, Mliswa said the ZWL local currency was being shunned by the citizens and the idea behind the managed currency auction system is to surreptitiously support and prop up this surrogate currency.

Read his full thread below:

My views on the current economic situation prevailing in Zimbabwe. We need to stick to a single currency regime& use the USD as the anchor or reference unit of accounting via a free currency market framework in order to stabilize the economy& ZWL currency parity is achieved.

We should reject these quasi-fiscal theatrics masquerading as a multi currency framework to create convergence between the two currency markets in order to achieve currency parity.They cannot protect value in our economy.

The fickle local ZWL is just a bond note by another name. The idea behind the managed currency auction system is to surreptitiously support and prop up this surrogate currency. This has dismally failed.

The current trading of the USD on the currency auction has deteriorated to appropriation of forex from the economy at large and "allocating" it as the banks see fit and favor. This is inadvertently, due to high demand and low supply of USD in the economy.

The then ill fated Transitional Stabilization Program that led to the still birth of the ZWL turned to be a harbinger of the death of the very local currency it had conceived, the ZWL. It appears that political gimmickry was employed rather than sound economic sense.

Invariably the ZWL failed miserably; then under the guise of COVID 19 Emergency Powers, the USD returned as a legal tender after being outlawed when the ZWL was ushered in on the background of the misguided Transitional Stabilization Program.

Truth be told, the ZWL is a facsimile of the equally ill fated bond notes. The currency auction system has now morphed into a Trojan Horse to secure forex at a discounted rate for vested interests, camouflaged by private bidders.

The ZWL is now reduced to a rubber pacifier filling the economy with gas as it sucks on wind. Any growth experienced on the equities markets and property markets priced in ZWL is bloated ZWL values.

The official auction rate is not applicable to these pricing matrices. Only accurate at parallel market rates, rendering the auction rate and auction system dysfunctional.

None of us here would sell their properties in ZWL at auction rate, non of us here would accept the auction rate for their USD cash.

Money is simply a medium of exchange for goods and services, a unit of accounting for such transactions& preserver of value at all times in the execution of the transactions. The ZWL fails on all these 3 parameters at official rate as a legal tender. So why use it?

The answer is simple; to maintain some semblance of economic policies for Zanu PF. To allow a free currency market is to dollarise the economy. The economy is now on the road to economic perdition with this moribund ZWL.

A USD driven economy may indeed be economic policy suicide for the government but it is the only salvation for the economy of Zimbabwe.

Source - Byo24News