{"id":30468,"date":"2020-11-24T19:36:22","date_gmt":"2020-11-24T17:36:22","guid":{"rendered":"https:\/\/www.africa-press.com\/zimbabwe\/all-news\/exchange-rate-stability-a-myth-says-biti-as-state-of-the-nation-address-fails-to-inspire"},"modified":"2020-11-24T19:36:22","modified_gmt":"2020-11-24T17:36:22","slug":"exchange-rate-stability-a-myth-says-biti-as-state-of-the-nation-address-fails-to-inspire","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/zimbabwe\/all-news\/exchange-rate-stability-a-myth-says-biti-as-state-of-the-nation-address-fails-to-inspire","title":{"rendered":"Exchange rate stability, a myth, says Biti as \u2018State of the Nation\u2019 address fails to inspire"},"content":{"rendered":"

Africa-Press<\/a> – Zimbabwe<\/a>. <\/strong><\/span>HARARE \u2013 Deputy president of the Movement of Democratic Change-Alliance (MDC-A) Tendai Biti has disputed the credibility of the foreign currency auction system used by the Reserve Bank of Zimbabwe (RBZ) to determine the value of the Zimbabwe Dollar (ZWL) describing the process as \u201crigged,\u201d 263Chat Business has learnt.<\/p>\n

Biti was giving a State of the Economy report this afternoon when he questioned the role of the Central Bank in determining the actual value of the ZWL against the American dollar (USD) at the weekly auctions when instead it should be the market through its respective banks that determine the value.<\/p>\n

\u201cOnly the Reserve Bank of Zimbabwe has been supplying foreign currency. So when you have got one supplier you cannot call that an auction. It\u2019s a fixed exchange rate regime because he who controls supply lines also controls the value of the product and you will see that the price of the foreign currency has remained constantly at 80,\u201d said Biti.<\/p>\n

Weekly official figures reflect that the ZWL has been stable since the introduction of the foreign currency auction system around June this year with the local currency maintaining an average of ZWL$80 against the USD.<\/p>\n

But the major concern around the valuation of the ZWL and the \u201csurprise\u201d stability has been that almost all regional currencies have been volatile given the COVID-19 disruptions on economic performances except for the ZWL.<\/p>\n

Analysts worry that the exchange rate could be manipulated as its somewhat proves immune to local and external headwinds.<\/p>\n

The South African Rand has been oscillating between 15 and 19 against the USD since January to date as a result of both local and international forces making it one of the hardest currencies to predict.<\/p>\n

\u201cFrom being among the best to the worst performers \u2014 and back again in a space of three days,\u201d leading South African online publication, Businesslive described the Rand this year.<\/p>\n

The same volatility has been witnessed with the Zambian Kwacha throughout the course of the year.<\/p>\n

\u201cSouth Africa is a US$ 400 billion economy. The Rand compared to the ZWL is fairly strong and it\u2019s anchored around 15 to the USD but it has been very volatile because it\u2019s not rigged, it\u2019s an open market system. The reason why it (ZWL$) has no volatility is that it is a controlled exchange rate,\u201d said Biti.<\/p>\n

Biti\u2019s remarks come at a time industry captains have also been calling on the independence of the auction system from the RBZ urging local banks to administer the process and make it inclusive of market forces.<\/p>\n

Recently, the president of the Zimbabwe National Chamber of Commerce (ZNCC) Tendai Manzungu in a virtual address to business stakeholders warned against the RBZ executing the duties of local banks in allocating foreign currency.<\/p>\n

\u201cBanks should be on the forefront in allocating the foreign currency and not RBZ. It should become law for these banks to do that because currently, it\u2019s limiting banks to support productive sectors,\u201d said Manzungu.<\/p>\n

However, authorities at the Central Bank have on many occasions expressed satisfaction that the foreign currency auction system is transparent and immune to manipulation hence a true valuation of the local currency.<\/p>\n

Economic analyst, Pepukai Chivore in an interview with 263Chat said any distortions to the auction system could have resulted in the growth of the premium which is not the case.<\/p>\n

\u201cThe genuineness of the exchange rate is not in its rate (Either high or low) but in its relative stability to foster price stability and improve market confidence. We have seen the official exchange rate fluctuating around 82-83 from week 8 of the auction that is 13 August. The effect has also been felt on the parallel market where exchange rate of between 95 and 110 has been maintained for the past 6 weeks or so. We can therefore use the 1:83 for international valuations without an iota of doubt and we trust that our authorities are not massaging the exchange rate. Any massaging will be reflected through the growth in the premium,\u201d<\/p>\n

\u201cAlthough some market watchers contend that the auction system reflects more of a crawling peg and is not entirely determined by market forces, the decline in reserve money from ZW$16,66 billion as of July 31 to ZW$11,81 billion as of August 14 in a way is an explanation of why the Zim dollar has been marginally firming,\u201d said Chivore.<\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Zimbabwe. HARARE \u2013 Deputy president of the Movement of Democratic Change-Alliance (MDC-A) Tendai Biti has disputed the credibility of the foreign currency auction system used by the Reserve Bank of Zimbabwe (RBZ) to determine the value of the Zimbabwe Dollar (ZWL) describing the process as \u201crigged,\u201d 263Chat Business has learnt. Biti was giving […]<\/p>\n","protected":false},"author":84,"featured_media":30467,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,6,35,15],"tags":[1493,19],"class_list":["post-30468","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","category-homepage-english","category-twitter","tag-africa-press","tag-zimbabwe"],"yoast_head":"\nExchange rate stability, a myth, says Biti as \u2018State of the Nation\u2019 address fails to inspire - zimbabwe<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/zimbabwe\/all-news\/exchange-rate-stability-a-myth-says-biti-as-state-of-the-nation-address-fails-to-inspire\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Exchange rate stability, a myth, says Biti as \u2018State of the Nation\u2019 address fails to inspire\" \/>\n<meta property=\"og:description\" content=\"Africa-Press – Zimbabwe. HARARE \u2013 Deputy president of the Movement of Democratic Change-Alliance (MDC-A) Tendai Biti has disputed the credibility of the foreign currency auction system used by the Reserve Bank of Zimbabwe (RBZ) to determine the value of the Zimbabwe Dollar (ZWL) describing the process as \u201crigged,\u201d 263Chat Business has learnt. Biti was giving […]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/zimbabwe\/all-news\/exchange-rate-stability-a-myth-says-biti-as-state-of-the-nation-address-fails-to-inspire\" \/>\n<meta property=\"og:site_name\" content=\"zimbabwe\" \/>\n<meta property=\"article:published_time\" content=\"2020-11-24T17:36:22+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/zimbabwe\/sites\/14\/2020\/11\/img-5fbd5c6db1c54.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"675\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/zimbabwe\/all-news\/exchange-rate-stability-a-myth-says-biti-as-state-of-the-nation-address-fails-to-inspire#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/zimbabwe\/all-news\/exchange-rate-stability-a-myth-says-biti-as-state-of-the-nation-address-fails-to-inspire\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/zimbabwe\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"Exchange rate stability, a myth, says Biti as \u2018State of the Nation\u2019 address fails to inspire\",\"datePublished\":\"2020-11-24T17:36:22+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/zimbabwe\/all-news\/exchange-rate-stability-a-myth-says-biti-as-state-of-the-nation-address-fails-to-inspire\"},\"wordCount\":740,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/zimbabwe\/all-news\/exchange-rate-stability-a-myth-says-biti-as-state-of-the-nation-address-fails-to-inspire#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/zimbabwe\/sites\/14\/2020\/11\/img-5fbd5c6db1c54.jpg\",\"keywords\":[\"Africa Press\",\"Zimbabwe\"],\"articleSection\":[\"all news\",\"Economy\",\"homepage-english\",\"twitter\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/zimbabwe\/all-news\/exchange-rate-stability-a-myth-says-biti-as-state-of-the-nation-address-fails-to-inspire#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/zimbabwe\/all-news\/exchange-rate-stability-a-myth-says-biti-as-state-of-the-nation-address-fails-to-inspire\",\"url\":\"https:\/\/www.africa-press.net\/zimbabwe\/all-news\/exchange-rate-stability-a-myth-says-biti-as-state-of-the-nation-address-fails-to-inspire\",\"name\":\"Exchange rate stability, a myth, says Biti as \u2018State of the Nation\u2019 address fails to inspire - 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