Illegal currency dealers counting losses

Ishemunyoro Chingwere, Harare Bureau
Some illegal currency dealers who stocked the US dollar over the weekend in anticipation of a monumental collapse of value of bond notes are beginning to count their losses as the surrogate currency remains stable.

Zimbabwe last Saturday woke up to a currency chaos with illegal street dealers demanding as high as $1,60 bond notes for every US$1 and paying up to $1,50 for the greenback.

The frenzy was, however, not backed by any fundamental changes in the economy with the Reserve Bank of Zimbabwe dismissing it as nothing but a product of social media misinformation and speculation.

The trend was not confined to currency dealers. Commodity speculators also jumped in and fuel was quickly wiped out of formal service stations with hoarders piling stocks, as if oblivious of the dangers that come with stocking the highly flammable liquids, in hope of a big pay day.

But instead of acute shortages, Government moved in and announced a US$600 million Nostro Stabilisation Facility from African Export Import Bank (Afreximbank) as a response to foreign currency shortages on the market.

For the fuel sector, the Nostro Stabilisation Facility was also a follow up to another announcement on September 19 that the apex bank had increased foreign currency allocation to the sector from US$7 million to US$10 million weekly.

In a snap survey conducted by this publication yesterday, some illegal traders were trading between $1,15 and $1,30 for a US dollar and fears abound in their circle that the surrogate money will continue to firm.

In an interview yesterday, RBZ Governor Dr John Mangudya, said expectation at the apex bank was for the premium being charged by illegal dealers to continue to hold and decrease as more foreign currency is injected into the market.

“Our advice is the market should not always be confused by social media as some unscrupulous dealers are bent on cashing on the unsuspecting public,” said Dr Mangudya.

“We urge the market and the nation to be patient as the economy recovers on the back of rising exports and the nostro stabilisation facility which we have begun to draw down therefore we expect the premium (being charged by illegal dealers) to hold and continue to decrease,” he said.