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1. 
Why arresting money changers won't work
Thread by @KMutisi
First of all, market problems are solved by market solutions, not by force. It never worked before and it will never work in future. This is a market problem requiring market solutions.
Why arresting money changers won't workThread by @KMutisi
First of all, market problems are solved by market solutions, not by force. It never worked before and it will never work in future. This is a market problem requiring market solutions.
2. Why forex black market?
It's simple, there is no white market!
The official rate is 1:1, so banks have no incentive to sell forex to anyone. *** This gives them a good reason to smuggle forex into the streets ***
The money changers are filling a lacuna here
Why forex black market?It's simple, there is no white market!
The official rate is 1:1, so banks have no incentive to sell forex to anyone. ***
This gives them a good reason to smuggle forex into the streets ***The money changers are filling a lacuna here
3. But the rates are going crazy, let's arrest these folks?
Nope, if you harass them, you actually increase scarcity of forex on the streets & increase the rates even more! We should actually be encouraging more people to sell forex so that the supply increases & rates fall!
But the rates are going crazy, let's arrest these folks?Nope, if you harass them, you actually increase scarcity of forex on the streets & increase the rates even more! We should actually be encouraging more people to sell forex so that the supply increases & rates fall!
4. Hey wena Kudzie, we should encourage more people to join the black market
Yep! The more suppliers we have, there will be competition amongst them & the rates will fall. It's a simple Economics principle. Liberalising markets is the way 2 go. Let people sell forex freely!
Hey wena Kudzie, we should encourage more people to join the black market Yep! The more suppliers we have, there will be competition amongst them & the rates will fall. It's a simple Economics principle. Liberalising markets is the way 2 go. Let people sell forex freely!
5. Since the rates are crazy already, will they drop or stabilize
Definitely! Unless RBZ prints more money!! With these crazy rates, many people will want to *burn* their forex & thus increase the supply. Demand will also plateau if money supply is kept constant.
Since the rates are crazy already, will they drop or stabilizeDefinitely! Unless RBZ prints more money!! With these crazy rates, many people will want to *burn* their forex & thus increase the supply. Demand will also plateau if money supply is kept constant.
6. So should we introduce the Forex White Market?
I say yes!! But it's only possible if we have a floating currency, not the pegged currency we have now. It's also disastrous to float the bond note/RTGS now, people's savings will be lost. Govt has to guarantee them
So should we introduce the Forex White Market?I say yes!! But it's only possible if we have a floating currency, not the pegged currency we have now. It's also disastrous to float the bond note/RTGS now, people's savings will be lost. Govt has to guarantee them
7. So you are saying we are stuck with the Forex Black Market now?
Yep! Until there is no more incentive for selling forex on the streets... Until there is no more demand for forex from the streets... Until there is a floating currency & banks can sell forex for a profit
So you are saying we are stuck with the Forex Black Market now?Yep! Until there is no more incentive for selling forex on the streets... Until there is no more demand for forex from the streets... Until there is a floating currency & banks can sell forex for a profit
8 So what's the way forward Kudzie?
Let's increase our exports & reduce our imports.. We will have lots of forex & all companies & individuals will be having access to cheap forex. The streets won't be relevant anymore. Production for export is the way to go!
Thank you!
So what's the way forward Kudzie?Let's increase our exports & reduce our imports.. We will have lots of forex & all companies & individuals will be having access to cheap forex. The streets won't be relevant anymore. Production for export is the way to go!
Thank you!
