Parallel market US$ rate re-gains after dip

Harare, (New Ziana) – The Zimbabwe dollar appeared to lose ground against the greenback on the parallel market on Monday after advancing three percentage points at the weekend following warnings by the Reserve Bank of a renewed crackdown on players propping up the illegal market.

The parallel exchange rate, which last Friday topped at around US$1: ZW$26 on the unofficial market compared to US$1: ZW$17 on the interbank market, slumped to ZW$23 after the central bank sounded warning bells and froze the accounts of a Chinese firm suspected of involvement in driving the black market.

“The bank remains focused on its mandate to ensure market stability,” RBZ Governor, Dr John Mangudya said on Friday.

“To this end, the bank will work closely with the Financial Intelligence Unit to identify and take appropriate action, in terms of the law, against any culprits involved in illicit foreign currency activities and manipulation of the foreign exchange rates.”

But on Monday, the black market rate appeared to have shrugged off the central bank warnings, and was heading north again, hitting a high of ZW$24.50 to the green back.

The interbank rate was ZW$17.2.

Bankers say companies and individuals with large amounts of money in their local currency accounts are the main culprits when it comes to sustaining the parallel market.

The exchange rate had been largely stable in the past four months but analysts have warned that the local currency will likely further devalue if the government awards civil servants a salary hike.

Exchange rate instabilities have been the main push factor driving prices of goods and services, and resultantly inflation.
New Ziana