1/10
It is absolutely necessary as citizens we never tire of highlighting the policy flaws. We made the emphatic point many times, that ZWL is being created to buy US at the fixed auction.
Belatedly, RBZ seems to have taken notice of this. The apparent speculation & arbitrage.
It is absolutely necessary as citizens we never tire of highlighting the policy flaws. We made the emphatic point many times, that ZWL is being created to buy US at the fixed auction.
Belatedly, RBZ seems to have taken notice of this. The apparent speculation & arbitrage.
2/10
Money supply of ZWL has been increasing at 315% by Nov 2020. Most of this ZWL finds its way to the fixed Auction rate. Giving importers a 40% discount.
ZWL “productive loans” are less than 40% p.a when inflation is at 322%.
This creates the perfect arbitrage.
Money supply of ZWL has been increasing at 315% by Nov 2020. Most of this ZWL finds its way to the fixed Auction rate. Giving importers a 40% discount.
ZWL “productive loans” are less than 40% p.a when inflation is at 322%.
This creates the perfect arbitrage.
3/10
The arbitrage is not only with importers. The speculation goes further in the market. Eg a firm/individual can buy steel/gas/ non perishables priced at 83 & simply hold the stock. When shortages arise, or when the inevitable devaluation occurs they’ll offload at a profit.
The arbitrage is not only with importers. The speculation goes further in the market. Eg a firm/individual can buy steel/gas/ non perishables priced at 83 & simply hold the stock. When shortages arise, or when the inevitable devaluation occurs they’ll offload at a profit.
4/10
Money is fungible. Meaning $$$ osmosis is inevitable. Money moves from high areas of concentration to low.
Some market players may not be consciously aware of their actions, but many understand that it’s better to keep stock funded by borrowed ZWL. It makes economic sense.
Money is fungible. Meaning $$$ osmosis is inevitable. Money moves from high areas of concentration to low.
Some market players may not be consciously aware of their actions, but many understand that it’s better to keep stock funded by borrowed ZWL. It makes economic sense.
5/10
The RBZ moral voice is in its policy instruments. But if the central bank naively believes inflation will be 10% at the end of the year. They fuel the credit creation bubble as banks try to lock in “high”interest rates. At least that’s what banks will argue
The RBZ moral voice is in its policy instruments. But if the central bank naively believes inflation will be 10% at the end of the year. They fuel the credit creation bubble as banks try to lock in “high”interest rates. At least that’s what banks will argue
6/10
RBZ & GOZ by printing excess money & credit creation has led to lots of ZWL in the market. It’s so much, that most will queue at the FX auction or go to the stock market. Both markets are way overvalued at the moment arising from excess money in the economy
RBZ & GOZ by printing excess money & credit creation has led to lots of ZWL in the market. It’s so much, that most will queue at the FX auction or go to the stock market. Both markets are way overvalued at the moment arising from excess money in the economy
7/10
Any demand in the economy is mostly speculative, anticipating shortages or inevitable depreciation.
This is unsustainable. Soon enough RBZ will be forced to raise interest rates & devalue Fx rate. Without offshore loans, this is inevitable. GOZ is scared of shortages.
Any demand in the economy is mostly speculative, anticipating shortages or inevitable depreciation.
This is unsustainable. Soon enough RBZ will be forced to raise interest rates & devalue Fx rate. Without offshore loans, this is inevitable. GOZ is scared of shortages.
8/10
Importers are locking in ridiculous margins at the expense of exporters. Funded by borrowed ZWL. Banks are becoming more creative in fleecing the exporter dollars. Eg using uSD cash cover to create more ZWL. Everyone else is speculating on the ZSE.
Importers are locking in ridiculous margins at the expense of exporters. Funded by borrowed ZWL. Banks are becoming more creative in fleecing the exporter dollars. Eg using uSD cash cover to create more ZWL. Everyone else is speculating on the ZSE.
9/10
The whole market is removed from production.
This is GOZ own making, urged on by the very people taking advantage of the cheap ZWL dollars & fixed FX. There is a serious moral hazard.
Why believe a guy getting FX at 83 when they congratulate GOZ for a job well done?
The whole market is removed from production.
This is GOZ own making, urged on by the very people taking advantage of the cheap ZWL dollars & fixed FX. There is a serious moral hazard.
Why believe a guy getting FX at 83 when they congratulate GOZ for a job well done?
10/10
There are serious international headwinds. Eg high oil prices, USD strengthening, lower remittances in 2021 & No new loans for Zim.
Before the situation gets out of hand, it’s time the country resolved its structural problems for the sake of the future generation.
There are serious international headwinds. Eg high oil prices, USD strengthening, lower remittances in 2021 & No new loans for Zim.
Before the situation gets out of hand, it’s time the country resolved its structural problems for the sake of the future generation.
• • •
Missing some Tweet in this thread? You can try to
force a refresh
