Reactions To SI 127 Of 2021 On Foreign Currency

2 years agoSun, 30 May 2021 09:19:52 GMT

Reactions To SI 127 Of 2021 On Foreign Currency

President Emmerson Mnangagwa last week issued Statutory Instrument (SI) 127 of 2021 that has an effect on the foreign exchange rate.

The SI dictates that businesses should use the US$1: ZWL$84 exchange rate.

The policy measures have attracted varying responses from finance and economics experts, politicians, other stakeholders and ordinary people. Pindula News presents below some of the responses.

One Tinashe M@baba_nyenyedzi said:

_…we were sold the following: (i) a good agricultural season (ii)a fixed exchange rate for 10 months resulting in decrease in inflation (iii) Fiscal prudence (iv) Business tours by the President showcasing successful enterprise (v) Zimra record-breaking collections.

When the reality was; (i) RBZ quasi-fiscal activities & debt of US$5bn (ii) Unsustainable Afreximbank loan interest above 10% & heavy penalty for defaulting. (iii) Money supply increase of 535% in Jan 2021. (iv) Black market rate > 60% (v) A kowtowing business class

That is the context in which we find SI 127, it’s a frustrated government that wants to achieve its goals by terror. It is now criminal to sell a good above the official exchange rate. This will remove USD pricing that implies a rate.

By quoting prices exclusively in ZWL a business can increase its price. OR Increase its USD pricing. In which case the customer will opt to pay in ZWL. So before the next explicit ZWL price controls, formal businesses will only quote ZWL. Informal will ignore the SI

The terror campaign by GOZ is driven by the rapid dollarisation of the economy & ZWL losing value. Never mind the RBZ lax monetary policy is the reason for the increase in money supply.. The stock market & black market rise because the stock of money has been increasing.

GOZ is panicking. It’s economic strategists promised to mend the economy in time for elections but the political hawks can see how impossible this is. It’s no use lying to people that inflation is slowing down when the people face runaway prices & dwindling wages.

SI 127 is an assault on the fundamental rights of people to freely trade in whatever terms they deem. It’s GOZ that decreed a fixed exchange rate. It’s GOZ monetary policy that increases ZWL supply. Yet it’s innocent citizens that are made criminals

_I’m keen on how long the auction system will sustain its charade. The current auction & RBZ policies are the same as Gono. Gono managed to reduce inflation to 135% using the auction. Gono’s black market rate took 18 months to get to 100%. Mangudya looks likely to beat Gono._

The leader of opposition MDC Alliance, Nelson Chamisa said the government was lacking skills required to keep the economy afloat. He said:

HOT DEALS:
itel A70 - (128GB, 3GB RAM) $89,
itel A70 - (256GB, 4GB RAM) $99
itel P40 (128GB, 4GB), (6000mAh) $99
itel P40 (64GB, 4G), (6000mAh) $93
Cash on Delivery in Harare & Bulawayo. Tinotumira kwamuri inosvika.

WhatsApp: 0783 450 793

_GOVERNMENT IS BEST WHICH GOVERNS LEAST..SI 127 signifies panic, lack of astute leadership and absence of prudent economic stewardship. Economic dirigisme and command economics is bad for business and worse for citizens. Rigging elections invites the temptation to rig the economy._