Spooked by the unpredictable banking system in Zimbabwe, it seems those with foreign currency are now preferring to either keep it in their mattresses and pillows or in off-shore bank accounts.
Data recorded by the Reserve Bank of Zimbabwe showed that foreign currency deposits which stood at 42% in September 2019 went down to 39% in the month of October 2019. Forex deposits suffered another decline from 39% to 36% in November. The trend continued in December where a drop to 34% was recorded.
The declined was probably precipitated by the introduction of Statutory 142 of 2019 which the government sprung on the nation back in June last year. The law made the nascent Zimbabwean dollar the sole legal tender of Zimbabwe and send foreign depositors scurrying for cover as the government looked like it would rob them of their hard currency and leave them with the much-loathed volatile dollar.
Government officials and the Reserve Bank of Zimbabwe have also demonstrated arrogance when it comes to passing regulations. There is no warning whenever they make drastically shocking measures such as the Supreme Court judgement which declared that all debts prior to February last year must be settled on a 1:1 rate.
Then there are rules which make onerous demands on those who have foreign currency in their accounts when they want to withdraw or make payments. Forced conversions to the ephemeral Zimbabwean dollar. The inevitable result has been an erosion of confidence.