Statutory Instrument 127 of 2021 is all everyone is talking about. It has upended the markets causing chaos and confusion. USD prices of various items have gone up now as shops are no longer allowed to offer USD discounts. There has been a lot of analysis out there already but one question that hasn’t been answered is how the new law is going to affect the foreign currency black market at its rates.

Forex black market is not going to die because of the new law.

First of all, the new law is not going to destroy the black market as some are claiming. The black market will always exist as long as the wider public is not allowed to officially buy foreign currency. Although the government has now allowed bureau de changes are allowed to sell foreign currency to the public they don’t have the foreign currency to sell. This means that ordinary people like me and you cannot walk into a bank or exchange and get the foreign currency they need.

As long as that is the case the black market will always exist to cater for the needs of people who want to do things like import a car, pay for a passport, pay fees for kids outside Zimbabwe or pay their DStv subscription.

How will the new law affect the rate

Now this is where it will get tricky. The rate will fall within the coming days before it rises back up again possibly to levels above the current rates. Now let me explain the rationale behind these two predictions:

Because of the new law, most formal shops are charging seemingly higher prices in USD. This is because most shops can no longer offer the usual USD discount. The USD prices in formal shops are so steep compared to ZWL prices that have remained the same. To avoid paying high USD prices most customers are going to try and sell their foreign currency to black market dealers. This will mean in the short term there will be an influx of foreign currency in the black market and based on what we have seen in the past there will be a dip in black market rates.

Also, an influx of foreign currency will see most buyers using up their RTGS float as they snap up the foreign currency. This will mean fewer buyers in the market and thus aid the dip I have just predicted in black market rates. There is a lag time between when the dealers on the black market buy foreign currency and when they sell it to businesses and get more float. During this lag time is when we will see rates temporarily fall. It’s hard to gauge where rates will land but expect them to fall below the 125 ZWL mark for swipe and ZIPIT. Do not be surprised if they fall below the 120 ZWL mark either.

Rates will rise up back gain after that

After a period of about two or so weeks, based on what we have observed in the past, rates will probably start to rise again on the black market. This is because businesses will now have exhausted their current store of foreign currency that they were receiving directly from customers. They will be now looking for foreign currency so that they can be able to restock and buy raw materials. This will lead to an increase in demand and to the float of black market dealers being replenished.

The increased demand for foreign currency in the black market will result in more players entering the market drawn by the prospects of more profit. This is when you will likely see rates start to rise as most people have predicted. Rates might rise beyond their current 135 ZWL mark because while businesses were taking in foreign currency directly they will now have to rely on middle-men to do it for them. These middlemen will want a cut for their efforts as is the norm. This might push the rate higher than the currently 135 ZWL.


We are not black market dealers. We neither sell nor buy foreign currency on the black market and these are just our private thoughts on the issue. We will not be held liable for any losses incurred based on our predictions which are not really predictions but rather a case of us rambling our musings. You should always follow the law in whatever you do.