Black market rates nosedive 1:1,5

Foreign currency dealers go about their business along Fort Street despite a blitz at the Tredgold magistrates’ courts in Bulawayo recently

PARALLEL market rates further plummeted to as low as US$1:RTGS/Bond1,5 this week from a peak of 1:6 in the last two weeks as Government forges ahead with implementing measures to stabilise the economy.

Government has guaranteed the 1:1 convertibility value of Real Time Gross Settlement (RTGS) balances into the United States dollar, as well as availability of the greenback for Nostro foreign currency accounts.

These are being complemented by a fight against graft, which has seen the apex bank this week suspending four senior executives following allegations of corruption and illegal foreign currency dealings.

The police have also cracked the whip on illegal forex dealers, popularly known as osiphatheleni, in a blitz that has seen at least 170 suspects being arrested so far this week.

A snap survey in Gweru and other major cities this week revealed that the parallel market exchange rate was at its lowest.

At Chicken Inn in the Central Business District (CBD) in Gweru, US$100, which was being exchanged for up to $500RTGS on the illegal foreign currency market recently, was going for as low as $150 bond.

At Post Office at Mkoba 6 shopping centre, it was the same story with the US dollar trading at 1:1,5.

Residents and illegal foreign currency dealers were in a hurry to dispose of their foreign currency as they were uncertain about the future value of especially the US dollar.

Experts have said the trend is expected to continue with the rates expected to self correct to the pre-monetary policy levels.

“I bought a lot of US dollars at high rates for resell at a higher rate. Just last Monday we were buying at 1:4 while some were buying at 1:3 and this morning the rates have tumbled and we are now buying at 1:2 or if I hit a jackpot 1:1,5,” said an illegal foreign currency dealer outside Chicken Inn outlet in the CBD.

Other illegal foreign currency dealers said their source of bond notes had without explanation told them that they were no longer supplying any float money.

“My boss from Harare said he is no longer in a position to supply me with bond notes. That’s the case with most of us here. We were fed from Harare and we don’t know if this is a result of the suspension of the RBZ bosses. Some familiar faces (dealers) are not here today. Only time will tell,” said another illegal foreign currency dealer on condition of anonymity.

Finance and Economic Development Minister Professor Mthuli Ncube is on record as saying Government had secured a loan facility from the Afreximbank to guarantee the 1:1 convertibility value of Real Time Gross Settlement (RTGS) balances into the United States dollar and the availability of the greenback for Nostro foreign currency accounts.

The availing of the Afreximbank facility followed widespread fears over loss of value for RTGS or electronic balances at banks on the back of spiralling parallel market exchange rates.

The situation has been compounded by unjustified price increases, which have seen some retailers increasing prices by more than 50 percent, despite the fact that producers have not increased prices.