ED blames ‘greedy’ private sector for currency woes

Zimbabwe President Emmerson Mnangagwa has blamed the country’s currency woes on political detractors and greedy private sector players.

The southern African country has been experiencing economic turmoil that has seen inflation reach a record 765.57% in April, while on the widely used parallel market the Zimbabwe dollar has depreciated to 70:1 to the US dollar from 23:1 in January.

Officially the Zimbabwe dollar is pegged at 25:1 against the greenback.

While economists blame the currency free fall on unrestricted money supply growth and the Reserve Bank of Zimbabwe’s reluctance to introduce a market based foreign exchange trading system, on Wednesday Mnangagwa told the ruling Zanu-PF party politburo members that it was the work of profiteering private sector players.

‘Battle fuelled by political detractors’

“On the economic front, we are witnessing a relentless attack on our currency and the economy in general through exorbitant pricing models by the private sector.

“We are fully cognisant that this is a battle being fuelled by our political detractors, elite opportunists and malcontents who are bent on pushing a nefarious agenda,” he said.

In the past, central bank governor John Mangudya has blamed currency woes on “asymmetric economic warfare that is going on” which he likened to economic “demons”.

Efforts to halt the Zimbabwe dollar tumble by freezing suspicious accounts and putting in place transaction limits on national payment systems have all come to naught.

Mnangagwa went on to say the country was not liberated for “selfish profiteers and greedy individuals but for all the people in our land who have a right to enjoy a better quality of life”.

The central bank’s monetary policy committee (MPC) has meanwhile suggested the currency weakness can be addressed.

In its latest deliberations released Sunday, the MPC expressed “serious concern over the continued deterioration in the exchange rates that were widely being used by the private sector” and resolved that the central bank introduce “formal market-based system of foreign exchange trading.”

“To ensure that foreign currency trades were monitored in real time, the Committee urged the Bank to expedite the implementation of the electronic foreign exchange trading system for compulsory use by bureaux de change.

“The Committee also urged more active application of the Open Market Operations (OMO) Bills to deal with any identified excess liquidity balances in the market,” reads part of the MPC statement.