Parliament grills finance ministry over auction system, deputy minister admits system flaws

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By Anna Chibamu

DEPUTY finance minister Clemence Chiduwa has admitted flaws in the current auction system which currently pegs the Zimbabwe dollar at $350 per US dollar when the black-market rate is almost double.

Responding to Citizens Coalition for Change (CCC) legislator Tendai Biti’s query in Parliament recently, as to why treasury was accommodating two official rates for the local currency, Chiduwa said they were working on scrapping one of the platforms.

“Whenever we come up with a policy, we need to ensure that we minimise the arbitrage which is of concern,” said Chiduwa.

“Now that we have the willing buyer willing seller on the auction, the medium and long term trajectory is that we should reach a stage where we should use one rate.

“The dollar will be in a position to discover its own position on the market so l agree with Biti that we need to reach that stage where we will use a single rate.”

The RBZ auction rate has been fingered in illicit financial flows where companies use its lowered figure to hoard US dollars while others involved in it have been accused of flooding the black market with Bond notes.

Other MPs demanded to know what the finance ministry was planning to do with those flouting exchange rate policies to which he promised they were blacklisting them.

Norton legislator Temba Mliswa demanded that they be named and shamed.

“We need naming and shaming. Those who benefited were named why can you not release names of those who violated the rules of the auction,” Mliswa said.

Chiduwa said government had no capacity to monitor activities across the whole country in relation to those who are benefiting from the auction but re-selling on the market in foreign currency.

He said 160 violators were penalised last week as the Financial Intelligence Unit (FIU) had 284 suspects under investigation.

The deputy minister stated that an environmental scanning done in 28 shops in Harare showed only 11 were compliant and 17 had violated the auction rules.