HARARE – Confederation of Zimbabwe Industry (CZI) chief executive Sekai Kuvarika has told parliamentarians that the current clampdown on foreign currency dealers was an act of panic by government, adding, the tendency to use police as substitute for policy will not yield long term benefits.
This follows the arrest and shaming of 65 foreign currency dealers by police on Independence Day as the new Zimbabwe Gold (ZiG) currency showed early signs of fragility on the parallel market.
They are due to appear in court for bail ruling on Wednesday.
Government insists activities of street dealers of foreign currency were causing havoc to the domestic currency, something that has necessitated the police blitz on the traders.
Kuvarika told parliament’s joint portfolio committees of finance and industry that the ongoing slide in the value of ZiG on the parallel market would not be solved by arresting street forex dealers.
“We urge authorities not to panic as policy takes effect. The challenge of accompanying the policy with the police is that the police can replace the policy,” she said.
“The market will now work with the police instead of the policy.
“They will work to ensure that the police does not catch them. We definitely do not support that we accompany our policies with the police.”
ZiG was launched early this month by new Reserve Bank of Zimbabwe governor John Mushayavanhu who pegged it at the rate of ZiG13.56 to US$1.
It is now trading at 20ZiG plus, on the parallel market, something that has embarrassed and further exposed government’s patent naivety in dealing with the country’s age-old currency turmoil.
Kuvarika urged policy makers to give the 2024 monetary policy time to work.
“This is policy inception. Let’s give ourselves time, let’s give the market and policy makers time,” she said.
Observers say any new domestic currency in Zimbabwe is doomed, for as long as the street is the only source of foreign currency for an economy which largely depends on imports.
