FIRST we heard that government was putting final touches to the much awaited Monetary Policy Statement (MPS) so that the final document is a polished piece of work that would finally breathe life into our troubled currency, the Zimdollar.
And as we agonisingly wait for the MPS, it appears something is the matter behind the scenes as monetary authorities seem to be scrambling to douse strong fires in the intensive care unit where our Zimdollar is on life support.
From what we are gathering, it seems as if our dear Zimdollar might not be responding well to intravenous medication and its pulse is way too low for the monetary doctors to risk removing its life support system.
One of the doctors privy to the goings-on behind the scenes gave us a faint hint that all might not be well with our beloved Zimdollar after he literally begged the country’s local authorities to underwrite or endorse the local currency to restore its value.
A Reserve Bank of Zimbabwe monetary policy committee member, Persistence Gwanyanya recently told a Local Authorities Convention in Masvingo that government expects local authorities to play their part to help resuscitate the local dollar by “underwriting the currency”.
“I am seeing the rates are converging. So, the monetary policy statement is coming at a time when the rates are converging. So, we expect you guys to also play your part in underwriting the currency by the reduced monetary expansion, which is a tight monetary policy, and super demand for the development dollar, we can stabilise our currency,” said Gwanyanya.
So, in simple terms, what Gwanyanya is begging our councils to do is to help government breathe life into our critically ill currency, right?
But the big question: Are we not insisting on addressing symptoms and not the causes? keeps begging for an answer.
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We thought the United Nations Economic Commission for Africa executive secretary Claver Gatete recently advised us to deal with the root causes of our currency volatility and not the symptoms.
“Once you deal with the issues of debt, once you deal with the issues that are causing the inflation, then definitely you have a high chance of making sure your currency is stable,” Gatete frankly told us.
Even if God, Allah, the gods and our ancestors underwrote our currency, it will not breathe life into it as long as our monetary authorities keep running away from confronting the elephants which have overrun our living room.
Gatete mentioned just two major issues of debt and inflation which have been wrecking and shredding our currency into a worthless pulp. But there are numerous other causes inflicting our currency such as the country’s toxic political environment, which is also greatly weakening the Zimdollar.
It then comes as no surprise that our monetary authorities are taking forever to release the MPS. Obviously, the maths are not adding up and some of the solutions, as suggested by Gwanyanya, will not work as long as we do not take the bull by the horns.
For far too long we have been barking up the wrong tree, and the quicker our monetary authorities accept this, the quicker we will stroll out of the woods.
