Bitcoin.com News received a letter from Kurai Matsheza, the president of the lobby group. He explained that markets would find the aggressive approach to the foreign exchange problem unsettling.
CZI boss insists on the time-bound implementation of measures that were agreed to by all parties at a consultative meeting.
After the 2008 collapse of the Zimdollar, Zimbabwe switched to multi-currency systems in which the U.S. dollars dominated. The ZWL (Zimbabian dollar) was reinstated in 2019.
Fast two years later, however, the ZWL/USD exchange rates are now at 88:1 on official markets and more than 170:1 in parallel markets.
In an effort to stop the ZWL’s continued depreciation on its parallel market, Zimbabwean authorities launched an operation that saw law enforcement agencies arrest suspected foreign currency dealers.
The central bank also blacklisted individuals who are suspected of aggravating the Zimdollar’s problems.
The CZI boss wrote the letter to express concern about the CZI’s operation against black-market foreign currency dealers. He stated:
We should not arrest people if policies fail. Instead, we should correct policies to improve their effectiveness.
He said that arrests cause panic on the market and reduce consumer confidence in government policies.
The Dutch Auction System
Matsheza maintains that only a Dutch auction could perform the function price discovery and open the door to a liberaler exchange rate regime. As a means of controlling foreign exchange allocations, the central bank created the auction system.
However, companies and individuals complain that they have taken several months to receive their allocations. This delayed response forced many companies to look for the USD on the parallel market.
Matsheza calls for authorities to manage the auction system in the spirit of the Dutch Auction System, even though the CZI has not yet called for its end.