TENDAI BHEBE IN BULAWAYO
The Reserve Bank of Zimbabwe (RBZ) says days are numbered for currency speculators whose activities have resulted in the illicit trade thriving again fuelling currency and price volatilities in the market.
Zimbabwe had in the past few months experienced relative exchange rate and price stability.
But, the dealers are now dragging the economy back into chaos again as prices of basic commodities rocketed again this week and the Zimbabwe dollar made significant losses since the beginning of December.
The local currency was this week trading at ZWL$950: US$1 on the parallel market from about ZWL$800:US$1 two weeks ago.
On the formal market, the Zimbabwe dollar also continues to lose value against the greenback and other currencies.
This week the Zimbabwe dollar was trading at ZWL$671.44: US$1 at the auction system. Two weeks ago the Zimbabwe dollar traded at ZWL$654.86: US$1 at the auction system.
Addressing stakeholders in Bulawayo this week, the Reserve Bank of Zimbabwe (RBZ)’s principal economist, Stephen Moyo said the resurgence of currency volatility was troubling the central bank which will continue its tight monetary policy stance.
“We are working with other arms of government like the Financial Intelligence Unit to make sure that behaviour is minimised because those speculators contribute to a lot of speculation that leads to the destabilisation of the currency, “ Moyo said.
He added: “So to all those quick rich speculators their days are numbered and the long arm of the law will deal with them. Speculation is going to be minimal.”
Speculative behaviour has been driving forward pricing models, which have an adverse impact on inflation and exchange rate expectations.
The Zimbabwe dollar has lost one of the fundamental functions of money, the store of value.
As a result, many are resorting to the greenback as their store of value as they fear the Zimbabwe dollar might fail to retain its purchasing power in the future.
There is also a huge informal sector, that is virtually trading all products in the United States dollars.
