Tinashe Murapata, also known as Baba Nyenyedzi, an economic blogger, has expressed skepticism regarding the Zimbabwean government’s claim that they have removed the Zimbabwean dollar from the market.
He believes that the auction system is rigged and warns that using the auction rate to determine the prices of goods in the economy is manipulative and will lead to further devaluation of the Zimbabwean dollar.
Murapata argues that the recent increase in the value of the Zimbabwean dollar against the United States dollar, which the authorities attributed to the disappearance of the Zimbabwean dollar from the market, is not genuine.
He explains that the calculation used to show the appreciation of the exchange rate is misleading because the parallel market rates have remained high, while the auction market rates have supposedly appreciated.
According to Murapata, the auction market has limitations and restrictions, such as not allowing the use of borrowed funds to bid for currency. He also questions the government’s claims of sucking liquidity from the market through the auction system, stating that liquidity does not actually change hands significantly in the process.
Murapata suggests that the government is using the auction system as a way to control and manipulate business operations, similar to how price controls were imposed under the previous regime. He argues that the auction is rigged, and the claims of liquidity withdrawal are also rigged.
In his view, the reliance on the auction rate to determine prices in the economy is a flawed approach, as it only represents a small portion of the import market. He believes that this manipulation of the system will eventually lead to a crash of the Zimbabwean dollar and calls it a forced full dollarization, as market players prefer trading in US dollars rather than participating in the rigged auction system.
Overall, Murapata expresses doubts about the government’s handling of the currency and warns of the risks of continued manipulation and devaluation of the Zimbabwean dollar.
