Stability of ZiG critical to reduce demand for use of US dollar

HON. MADZIVANYIKA: My supplementary question goes as, is it not that this is as a result of a supply or demand deficiency because economics follows logic?  There is no abracadabra as highlighted by the Minister of Higher Education.  My question therefore is; is it because  there is a policy deficiency that is where we are going to involve the police to take charge?  To suggest Minister, the absence of Bureau de Changes, does it actually not inconvenience other people who want to hold a few foreign currencies to use on their daily basis, which creates this gap which is being used by other people to do illegally?  My question therefore to the Minister is; is it possible to correct this without the police but introducing a watertight policy that encourages Bureau de Changes so that everyone else is free to get foreign currency? These people are just utilising a gap in the market. I submit.

HON. PROF. NCUBE: I thank the Hon. Member for the question, but I do not think you will find many owners of big wholesale shops queueing to get foreign currency from a Bureau de Change. So, I suspect that is not the solution. His point is valid, which is perhaps the Bureau de Changes have to be capacitated so that we can have a more inclusive approach to access foreign currency. We make sure that we will look into that to see how they can be capacitated, supported with foreign currency supply so that they can sell to the greater public. For the wholesalers, if I can link that to the prior question, that is clear indiscipline. It has nothing to do with the absence of Bureau de Changes, but I do accept that having Bureau de Changes that are effective and systems that are effective, we will assist the public in terms of access to foreign currency and we will reduce the need and pressure to go to alternative markets which are illegal. I thank you.

HON. DR. MUTODI: Thank you Mr. Speaker Sir. My question to the Minister is; is there a long-term plan to reduce the demand of USD in this economy? If we go to other countries like South Africa, you would find that they do not accept the USD100 note. They prefer to use their local currency. Can we not have the demand for USD reduced while we increase the demand for the local currency?

HON. PROF. NCUBE: Thank you Mr. Speaker Sir. I thank Hon. Mutodi for the question. Yes, we have a plan for increasing the use of the ZiG and therefore reduce the demand of the use of the USD. First of all, the first order of business is to make sure that the ZiG exchange rate is always stable within reason. When we say stable in exchange rate language, we mean stable within reason. It means that we maintain stability. Once the currency has a track record in stability, it becomes more acceptable as a transacting currency and also as a store of value and as a currency in which citizens can make their savings in investments.

So, the first order of business is stability. To accompany that, we need to increase the use of the ZiG through creating super demand for it by basically legislating that certain taxes and fees from Government should be paid in the local currency. We are working on that and we will be announcing as to which taxes we paid only and solely in ZiG currency. Creating that demand is critical and gradually, you will see the demand of the ZiG increasing, but what is really important is the stability of the currency. That way, the currency really gains a credibility through that stability track record.  I thank you.

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