Full debate on how Finance Minister Mthuli Ncube was grilled in Parliament

HON. T. MLISWA:  With all due respect Mr. Speaker, the Minister must be aware of the situation on the ground;  it is simple.  There is the interbank and bond rate on the market.  There is no way you can separate the two because the people who are buying those goods…

THE HON. SPEAKER:  Address the Chair!

HON. T. MLISWA:  Thank you Mr. Speaker Sir.  The people who are buying those goods are using the current prevailing rates.  This means that they have no choice but to bring their prices up.  Those who are also buying foreign currency on the market to get the raw materials of the goods continue to do that.  The question that I have for the Minister which must be understood – there is no longer trust in the Ministry of Finance, neither the Government in terms of these monetary issues.

First of all, bond to US$ is one to one.  You change it, you steal people’s money openly as a Government and there is no more trust.  What can you say to the nation today so that we can at least trust this Government for what it says on the monetary issues – [HON. MEMBERS:  Resign, resign, resign!] –

THE HON. SPEAKER:  Order, order, order – [HON. MEMBERS:  Inaudible interjections.] – Order.

HON. PROF. M. NCUBE:  Thank you Mr. Speaker Sir.  I thank the Hon. Member for that spirited question once again.  First of all, he must trust us.  The nation must trust us, the reason being that we “walk the talk” on everything that we say.  We said that we will stabilise Government finances and institute fiscal discipline and we have done that.  We also said we are going to reform the monetary sector and system – we have done that.  We have also said that we will continue to fine tune the monetary sector – we are doing that.

Let me begin from there to answer the question more directly. We introduced an interbank market on the 20th of February and the Governor has been very clear and I repeat his words as well that we are continuing to fine tune that market so that it works efficiently.  There is foreign currency in the nostro accounts.  There is about US$800 million and we need to make sure that we fine tune the market so that those monies can be released into the market and everyone can access the foreign currency through the interbank market.

It is certainly true that business people are sourcing money from the parallel market, otherwise it would not be existing in the first place and they use this for pricing goods and so forth.  Our argument is, why do it when you have got an interbank market and there is no reason to have the parallel rate where the fundamentals do not support it either in the form of both money supply, the current account deficit nor the fiscal position do not support that high exchange rate and therefore, players must move back to the interbank market because we believe that is where the market ought to be– [AN HON. MEMBER: You are not quitting, ayaas zvakaoma.] – but we continue to fine tune the market in this multi-currency regime.  I thank you Mr. Speaker Sir.

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