……As parallel market dealers switch to banks
The Reserve Bank of Zimbabwe (RBZ) should beef up foreign c u r r e n c y
inflows in order to stabilise the exchange rate instead of suspending the mobile money platforms, analysts have said.
The reactions to new government measures come barely a week after the
government suspended all mobile payment platforms and the Zimbabwe Stock Exchange to pave way for investigations for illicit financial transactions.
Parallel forex market hovers between 1:80 and 1:100 with official bank rate standing at 1:63.7.
Since the closure of mobile money platforms the parallel forex rate has not moved instead it has slightly retreated by ZWL$5.
Economists argued that the government was not sincere in dealing with perpetrators of illicit foreign currency dealers as it has left other avenues for underhand financial dealings.
Economist Persistence Gwanyanya told Business Times that more needs to be done to stabilise the forex rate as the illicit forex dealers are known for improvising thereby evading new restrictions.
“The monetary authorities should reinforce foreign currency inflows in order to stabilise the forex rate and one way to do so is to instill confidence in the market to unlock US$1bn exporters’ money locked in the FCA
account,” he said.
“The closing of mobile payment platforms is only one piece of the puzzle
which will not solve the forex challenges as a wholesome approach is needed to deal with this complex situation.
Confidence issues are the ones affecting the rates day and night.”
In a snap survey carried out by the Business Times, most forex exchange dealers were not operating payment platforms like Ecocash and One Wallet.
Those dealing with Ecocash were trading at 1:80 and One Wallet at 1:90 but are using personal lines to transact.
The illegal forex traders are using more than five personal lines to trade on the parallel market.
Another economist John Robertson said the mobile money payment platforms have somehow contained illegal forex dealers as very some amounts limited to social transactions are transacted to buy groceries
and utilities payment.
“We expect more forex to come through the forex auction trade system in the next three to four weeks as the dollar will be trading higher.
The prices of commodities will continue to rise as long as the rate hasn’t stabilised,” Robertson said.
“We hope that the commodities prices will stabilise soon after the importers have recovered the money they have used to buy forex from the auction system from as high as 1: 100.”
He said the parallel market will lose steam once the auction system gains
RBZ has implored all holders of foreign currency to sell their money through the apex bank’s auction market at their preferred prices, to
enhance the efficiency and effectiveness of the new platform.
This week, RBZ governor John Mangudya said holders of hard currency among them exporters, non-governmental organisations, bureaux de
change and receivers of remittances can participate on the auction market directly by selling at preferred prices their funds to the RBZ.
The dollar is trading at 1:63.7 after the second auction held on Tuesday
from 1:57.3 at the inaugural auction held last week