Has Biti ditched dollarisation?

Citizens Coalition for Change vice-president Tendai Biti who has been a strong proponent of dollarisation, persistently telling Finance Minister Mthuli Ncube to ditch the local currency for the economy to stabilise, seems to have changed his mind.

In his contribution to the debate on the supplementary budget which he said was not a supplementary budget at all but a brand new budget, Biti urged Ncube to float the local currency so that there is stability in the country.

“I was in Kenya a few days ago, they have floated the Kenyan shilling.  The average exchange rate is 1: 6000.  Everyone knows that the Kenyan shilling trades at 1: 6000.  If you go into a Kenyan bank, they will ask you – do you want Ugandan shillings, Kenyan shillings, Tanzanian shilling, Euros or bond?(Really?),” Biti said.

“The minister must float the Zimbabwean dollar so that there is currency stability in this country.  When you do that, when there is predictability and certainty, then you can budget.

“The 2022 Budget was predicated on inflation of 35% but inflation right now is 600% yet the minister knew this.  It was foreseeable because the black market was there but we also know that the biggest generator of inflation in Zimbabwe is actually the government itself.”

Biti acknowledged that the new measures introduced by the government, which included the introduction of the gold coin, were working saying that the parallel market rate is over 1: 800.  A few days ago it was 1:1200, he said.

Bloomberg, a financial news agency, however, said the rate was tumbling and was now down to $740 for huge amounts of a million dollars and above, down from $950. For smaller deals, it said, a greenback will cost $620 against $800 last month.

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