Biti: Inflation now 430%; exchange rate 1:800; Mthuli must explain

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By Staff Reporter

OPPOSITION Citizens Coalition for Change (CCC) deputy leader and Harare East legislator Tendai Biti has demanded a ministerial statement by Treasury on the country’s worsening economic crisis.

Speaking in Parliament Wednesday, Biti said Finance Minister Professor Mthuli should give a statement to the House on the country’s runaway inflation and exchange rate depreciation.

“The cost of living has risen, inflation is now 430%,” said Biti who was finance minister during the coalition government.

“Therefore, I am respectfully asking the Minister of Finance and Economic Development to give a Ministerial Statement on the rising inflation, the exchange rate which is now 1: 800 and the continued arbitrage.”

Zimbabwe’s economy has been on a downturn for nearly two decades, marked by shortages of cash and basic commodities.

The situation has worsened this year as the Russian invasion of Ukraine compounded with black market foreign exchange has depleted the value of the Zimbabwe dollar.

An intervention in May which imposed a lending freeze was reversed after just one week as it became clear the new measures were only worsening the crisis.

Late last month, new measures were announced including increasing interest rates to a world record 200% as well as introduction of gold coins which are expected to help investors store value as the local currency continues to rapidly devalue against major currencies.

However, the new measures do not seem to be taming the runaway inflation forcing retailers have also started demanding payment in US dollars only for some products.

Said Biti Wednesday; “In the shops there are now goods that are being charged exclusively in USD.  Cooking oil, sugar and other commodities – retailers are refusing to accept ZWL.

“Madam Speaker, in that Ministerial Statement, may the Minister of Finance and Economic Development also explain the logic of gold coins.”

Government has responded to the US dollar pricing by threatening to cancel trading licences saying the move was illegal.

“I want to make it clear and categorical that this is totally unacceptable,” said Mthuli Ncube at Tuesday’s post cabinet media briefing.

“We will withdraw licences, and will withdraw the duty rebate licences for companies that have been doing this,” said Minister Ncube.

“They are breaking the law. The law says the citizens or anyone approaching the shops should offer the currency of their choice.

“We cannot tolerate this kind of nonsense, absolutely not. They are breaking the law.”