Parallel Market Exchange Rates Tumbles

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By Alois Vinga

EXCHANGE rates on the parallel market remained stable in the last two weeks following a raft of measures implemented by the Reserve Bank of Zimbabwe (RBZ) among other factors.

The central bank has since put in place measures to mop up the excess liquidity sitting idle in some corporate and individual accounts, maintaining a close eye on debit card abusers and assisting in the arrests of illegal currency dealers.

Prior to the interventions early this month the exchange rate had risen to a premium of US$1:$200.

But a visit by crew disguising themselves as clients wishing to exchange the United States dollar the Zimbabwean dollar from parallel market dealers along Fourth Street, Copacabana area in Harare’s Central Business District zone as well as Mbare Musika areas confirmed the latest declines.

“I am now paying $165 per every US$1 and I am actually the highest here since most dealers are paying far much lower than that. Some are even paying as low as $130 per every US$1 and if you take more time moving around you risk getting a much lower rate,” said one dealer who identified himself as Godwin.

The dealers also complained over their incapacity to push high volume trades which they attributed to stricter procedures on cash movements being implemented by the banks.

At Mbare Musika market, dealers were however paying $140, 00 cash per every US$1 but bank transfers remained at $165, 00.

Even the payment of civil servants’ salaries this week did not manage to escalate the exchange rates as anticipated earlier by a section of market watchers.

Analysing the latest trends, Doctor prosper Chitambara attributed the shifts to the hard clampdown exerted by authorities this week.

“The efforts have quickly nipped the spiralling exchange rates in the bud, making it optimistic to see stability finding its way in the short to medium term period. Going forward, long term stability will  depend on the measures put in place by authorities to bridge the gap between foreign currency demand and supply among other factors,” he said.

The seasoned economist called on authorities to keep improving the RBZ foreign Exchange Auction system and maintaining the cap on money supply.

“However, since the country has gone past the maize and tobacco selling season peak, we expect money supply to ease a bit which will be a positive factor on stability,” he added.