Discipline now needed to keep prices stable as Zimbabwe has US$1.9 billion in banks

HON. MARKHAM: Mr. Speaker, buttressing on what you have just said and the Minister’s reply, could the Minister explain what disciplinary action or monitoring are they doing as a policy, on companies that are taking money on the auction rate at Z$85:US$1? Are they sure that the product when it comes into this country is being priced at Z$85: US$1 or at the parallel rate? I do not believe there is any monitoring. Could the Minister explain the disciplinary policy on that?

HON. PROF. MURWIRA: I wish to thank Hon. Markham for further rising points of clarification on this very important issue. People are getting arrested, certain CEOs because of the issue of the punitive lines that are in Statutory Instrument 127 or 27. The people that are abusing the auction rate are being punished heavily in terms of funds by the RBZ and we believe that while the law is also taking its course in this way, national pressure including pressure from this House has to take place so that people know that a country is a country of people and together we need each other. However, as we try to implement these disciplinary measures, what we are seeing is that these are small explosions on a rising curve. This country is stabilising and the economy is improving and we are expecting that the economic growth rate of this country is going to be the highest in Africa and Southern regions. So, I ensure that the measures we are taking, we might not see the effects this week or next week, but we will see the stabilisation as we go forward towards December. I thank you.

HON. GONESE: My supplementary is, if the Hon. Minister can clarify why there is a backlog in terms of the supply of foreign currency in respect of business which would have bid for the currency and had their bids accepted yet they do not access the foreign currency. Others are unable to access foreign currency on the auction market. Is this not an indication that there is not enough in terms of supply and is this rate not an artificial one?

HON. PROF. MURWIRA: I wish to thank Hon. Gonese for a further question on this important issue. The thesis of Hon. Gonese is on the artificiality or whether the rate is artificial. It is not artificial as it is determined by auction and it is a weighted average that is determined by the Dutch Auction System. On issues of some people who might not be able to access foreign currency, that is very specific because there are rules for the auction, basically.

On the issue of whether there is enough supply of the USD, Hon. Speaker, I have just said statistically and this is true. This country has the largest proportion or sum of USD in the banks since 1980, about US$1, 9 billion plus but also when we look at glitches in the implementation system which was clearly explained by the RBZ, that if there is any backlog that might have been caused by glitches, this is going to be cleared by the end of this September. This has been clearly put by the RBZ, so all measures are there because what is happening is that no matter what, the trend is rising and anything that might be happening is just temporary. I thank you.

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