Money changers feeling the pinch

HARARE - Black market foreign currency traders have been hit hard by the new measures that were announced by the Reserve Bank of Zimbabwe (RBZ) last week, which have seen parallel rates beginning to stabilise.

This comes as the government is, at the same time, ratcheting up its blitz against illegal forex traders, leading to the traders — commonly known as Osiphatheleni in Bulawayo — suffering the double whammy of having to contend with both tumbling rates and the renewed government crackdown.

Yesterday, the local RTGS dollar was, on average, trading at between 3,4 and 3,6 to the American dollar on the parallel market in Harare and Bulawayo, depending on volumes — down from about four RTGS dollars at the end of last week.

“RBZ personnel, working together with the police, are patrolling the streets and searching suspected money changers. If they find you with more than $300, they demand an explanation and … also force you to go and deposit the money in a bank or you face arrest,” an aggrieved trader told the Daily News.

“The rates are unfortunately going down because of what (RBZ governor John) Mangudya did. For US$100 we will give you 340 bond or 360 RTGS depending on the numbers,” weighed in the trader’s counterpart — who said she was conducting her business underground.

Presenting his Monetary Policy Statement (MPS) in Harare last week, Mangudya said the new monetary policies that he effected would stabilise both exchange rates and the prices of goods and services.

He also revealed that the central bank had put in place measures to maintain stability in the market through the establishment of an inter-bank foreign exchange market with immediate effect — to formalise the trading of real time gross settlement (RTGS) balances and bond notes with hard currencies, on a willing-buyer willing-seller basis, through banks and bureaux de change.

“This is essential in order to bring sanity in the foreign currency market, whilst at the same time promoting exports, Diaspora remittances and investments for the good of our national economy,” he said.

“The use of RTGS dollars for domestic transactions will eliminate the existence of the multi-pricing system and charging of goods and services in foreign currency within the domestic economy.

“In this regard, prices should remain at their current levels and or to start to decline in sympathy with the stability in the exchange rate given that the current monetary balances have not been changed,” Mangudya added.

The interbank market became operational on Friday, with the RTGS dollar officially trading at 2,5 against the United States dollar.

Meanwhile, 24 illegal foreign currency traders appeared at the Harare Magistrates’ Courts yesterday on allegations of violating the foreign exchange laws — which now attract up to 10 years in prison.

Six of the alleged money changers were granted $150 bail each, with the rest being remanded in custody to today, for bail applications.