HARARE: Business people are taking advantage of prevailing liquidity challenges by charging premiums of between 10 and 20 percent to desperate cash seekers.
A bar owner operating in one of the city’s eastern suburbs who refused to be named told Xinhua Tuesday that people looking for cash were paying 10 percent of the required amounts for bond notes and 20 percent for US dollars while making electronic transfers into the business people’s bank accounts.
“They cannot get the cash for free. Many business people are doing this because they have to get value from the transactions,” he said.
He said cash seekers would identify retailers wanting to place orders for goods at wholesalers using cash and asked to be given the cash in return for electronic transfers.
“The same is happening in the shops and council and utility banking halls where some people just mill around waiting for people intending to use cash and then offer to buy goods on their behalf using Points of Sale in return for the cash. But here no premiums are charged,” he added.
Reserve Bank of Zimbabwe (RBZ) governor John Mangudya has blamed the emergence of the black market on indiscipline and general lack of confidence in the market.
RBZ recently directed that retailers and wholesalers to bank excess cash collections within 24 hours as a way of boosting liquidity in the market, but some of them have found a way of “banking” their proceeds in plastic money while getting value from the cash collected.
“Many people are looking for U.S. dollars because they have to meet certain obligations outside the country, so it is easy to charge higher premiums for the U.S. dollar than the bond notes. Unfortunately the cash is not getting into the banking system,” the bar owner said.
RBZ in 2016 established a list for foreign currency disbursements which leaves college fees payments at the lowest rung of priorities, so parents have devised other means to send money to their children, including getting money on the black market.
Many people are also believed to be hoarding the bond notes for use in places which do not have Point of Sale machines, while others just remain skeptical of the banking sector and would rather keep their money elsewhere.
The bond notes and coins, which were supposed to trade at par with the U.S. dollar, were introduced between 2014 and 2016 in a bid to improve liquidity, but the central bank is facing a mammoth task trying to keep the rates at the same level as the U.S. dollar becomes more elusive.Advertisement
About 130 million dollars worth of bond notes and coins are now circulating in the economy but these have failed to satisfy demand, although Mangudya said recently that they were sufficient, together with about 900 million U.S. dollars said to be in circulation.
The local currency, the Zimbabwe dollar, became moribund in February 2009 and made way to a multiple currency regime dominated by the U.S. dollar and, in the initial stages, the rand.
The others are the Australian dollar, British pound sterling, Botswana pula, Euro, Indian rupee, Chinese yuan and Japanese yen, but these have hardly been in use.