Black mar­ket rates tum­ble

The Herald (Zimbabwe) - - National News - Her­ald Re­porters

PAR­AL­LEL mar­ket rates plum­meted yes­ter­day af­ter Gov­ern­ment 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.

Fi­nance and Eco­nomic De­vel­op­ment Min­is­ter Pro­fes­sor Mthuli Ncube on Wed­nes­day said 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.

US$100, which was be­ing ex­changed for up to $600 on the il­le­gal for­eign cur­rency mar­ket on Wed­nes­day evening, plunged to as low as $200 by 7pm last night.

The trend is ex­pected to con­tinue to­day, with the rates ex­pected to self cor­rect to the pre-mone­tary pol­icy lev­els.

Most il­le­gal for­eign cur­rency deal­ers in Harare and Bu­l­awayo were in panic af­ter they bought the US dol­lar at high rates for re­sell at a pre­mium.

“Things are not well at all,” said an il­le­gal for­eign cur­rency dealer op­er­at­ing close to East­gate Shop­ping Mall in Harare. “Rate rawa (plunged) from be­tween $450 and $500 to be­tween $200 and $250.”

An­other il­le­gal dealer said they were fac­ing losses af­ter spend­ing more to fetch the green­back.

“Tanyura mud­hara (We have in­curred losses). We bought it (USD) at a higher value and its value is fall­ing fast against the bond. We are be­ing forced to dis­pose of it to avoid fur­ther losses,” said the il­le­gal for­eign cur­rency trader based at Road­port in Harare, speak­ing on con­di­tion of anonymity.

The same sit­u­a­tion pre­vailed in Bu­l­awayo, ac­cord­ing to our bu­reau.

“We are go­ing to go hun­gry if the sit­u­a­tion con­tin­ues like this,” said a sphathe­leni (il­le­gal money changer), who de­clined to be named. We are go­ing back to the years be­tween 2010 and 2012. No one was both­er­ing to change money as things were fine.

“There were a lot of US dol­lars on the streets. We are doomed.”

A dis­grun­tled busi­ness owner in Bu­l­awayo said she felt short­changed af­ter she bought US dol­lars at a higher rate hop­ing to sell them at a pre­mium.

“I have lost out,” she said. “I bought US$1 000. I just feel like I made the worst blun­der of my life. I can­not go back to my dealer and ask for my money back. I will just have to wait and see how it goes.”

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.

Min­is­ter Ncube, who is in Bali, In­done­sia, at­tend­ing the In­ter­na­tional Mone­tary Fund and World Bank meet­ings, al­layed fears over loss of RTGS sav­ings, say­ing Gov­ern­ment had put in place mea­sures to re­tain value for elec­tronic de­posits.

“Gov­ern­ment recog­nises con­cerns sur­round­ing RTGS de­posits and we com­mit to pre­serve the value of these bal­ances on the cur­rent rate of ex­change of 1 to 1 in or­der to pro­tect peo­ple’s sav­ings,” said Prof Ncube in a state­ment.

He later posted on his Twit­ter ac­count say­ing: “To­day in Bali, In­done­sia at the IMF/World Bank Meet­ings, I had fruit­ful dis­cus­sions with the Pres­i­dent of Afrex­im­bank Dr Oramah. Afrex­im­bank has of­fered Zim­babwe a fa­cil­ity to guar­an­tee 1:1 con­vert­ibil­ity of RTGS bal­ances into US$ and avail­abil­ity of US$ for Nos­tro For­eign Cur­rency Ac­counts (FCA).”

Prof Ncube could not dis­close the value of the back-up fa­cil­ity.

Act­ing Min­is­ter of Fi­nance and Eco­nomic De­vel­op­ment, Sithem­biso Ny­oni, yes­ter­day ap­pealed to Zim­bab­weans to de­sist from buy­ing goods from the par­al­lel mar­ket where prices are ex­or­bi­tant fol­low­ing the price hike mad­ness grip­ping the coun­try.

The past week has seen un­scrupu­lous deal­ers hik­ing prices of goods and ser­vices to un­re­al­is­tic lev­els re­sult­ing in panic buy­ing by cit­i­zens.

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