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Going back to the real dollar

Barely two years after criminalizing use of the American dollar for local transactions, the government has shifted gears.

With tail between the legs, Reserve Bank Governor, John Magundya has recently been at pains justifying why the government has allowed a substantial number of filling stations to sell fuel in foreign currency.

Long winding fuel queues have become a part of us and the government in its wisdom or lack of it thinks selling the commodities in US dollar will change the situation. Maybe it will, one just never knows, we will just wait and see.

But I can bet with my last bond note that this will not change anything because there were already a few filling stations selling in forex and rarely ran out fuel.

What this simply means is that very few people have forex to spend. Where are motorists expected to get US dollars to buy fuel when salaries are paid in the local currency?

The same government barred paying of salaries in foreign currency even for companies that export their produce and products yet it turns around and say some commodities can be sold in hard currency, it really baffles the mind.

What cannot be denied though is the fact that the Zim dollar is no longer a preferred currency for most businesses because of the rate at which it is losing value.

It might be hard for the current regime to admit failure but if truth be told, re-introducing the local currency and doing away with the multi currency system was ill-timed.

But in any case, I think allowing fuel traders to sell in foreign currency is a diplomatic way of admitting that our bond notes are worthless.
Very soon, most companies will follow suit.

For now most businesses are accepting the local currency but rating their prices in US dollars using the black market rate but I foresee a situation where eventually most will also demand the hard currency and disregard the fact that people don’t get paid in forex.

This will further worsen our plight as we are already breathing through the wound and finding the going extremely tough.

In other news, mealie meal shortages continue to bite amid reports that the big fish are the ones actually diverting the staple grain to foreign markets.
Our leadership really doesn’t care.

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