FORMER Minister of Finance Tendai Biti has predicted that today’s Monetary Police Statement (MPS) to be presented by Reserve Bank of Zimbabwe (RBZ) Governor John Mangudya “will lack the thunder of a new currency.”
Biti, who is also Harare East legislator as well as opposition MDC Deputy National Chairperson, had last week sensationally claimed that the RBZ was going to introduce a new currency that very week.
But today Biti, writing on Twitter, said that won’t happen anymore “because we caught them pants down”.
Said Biti: “Today’s Monetary Policy will lack the thunder of a new currency after we caught them with their pants down.A decent Monetary Policy should however 1) demonetize the bond note 2) ring fence RTGS balances 3) strengthen multi currency regime 4) remove export retention 5) stop quasi fiscals (activities),” said Biti.
He however suggested that floating the bond note against the US dollar will be a matter of treating the symptoms and not the cause. He called for the total recall of the surrogate bond note so that the nation completely trades in the greenback.
“Liberalizing or floating exchange rate is dealing with symptoms. Bond note should simply be ejected . Besides bond note and its fictional parity is set as law in the RBZ Act so only Parliament can float or liberalize exchange rate.”
Biti reckons that the RBZ was unlikely to floating the exchange rate without providing a cover for RTGS balances held in the banks as these would be instantly devalued, leading to massive legal lawsuits against the central bank.
“Floating the exchange without ring fencing RTGS balances will have the disastrous consequences of devaluing people’s balances. Floodgates of litigation will open.
“Further floating exchange rate and retention of the bond note will guarantee the continued existence of a key pillar of corruption in this economy. ZANU-PF elites will continue raiding the RBZ for cheap foreign exchange which they will arbitrage,” said Biti.
Biti concluded saying the problem facing Zimbabwe was purely political and that if the politicians settled their differences, only then can the economy start on the recovery path.
“The truth of the matter is that no amount of economic tinkering can resolve the huge structural challenges Zimbabwe is facing.
“The crises is political . It’s a crises of legitimacy, and governance No one can govern without the consent of the people. Illegitimacy breeds illegitimacy.”
Last week, Biti had said: “The regime has been caught with pants down. It is a fact that a new currency has been printed and that negotiations are taking place now with major holders of cash.
“It is fact that Cabinet has approved new currency despite paternity fight between John [Mangudya] and Mutuvi [Mthuli Ncube]. Now please deny this!” Biti has said.
The RBZ dismissed that as mere speculation.
RBZ Governor John Mangudya is set to present the MPS today at 14.30hrs — ZOOMZimbabwe