Here is some frightening news to some of you. For the past number of days there hasn’t been an universally accepted black market rate. We are seeing it in a lot of forex related WhatsApp groups, people desperately asking what the current rate is.
There is no rate because the black market is on holiday!
This was all predictable and makes sense
If there was something that most people should have anticipated, when the lockdown was announced last week, was the fact that it would have a chilling effect on Zimbabwe’s thriving forex black market. I mean it’s common sense, right? Wrong!
It seems a lot of people out there had become hooked on the daily rate movement and now that there is a lockdown and hardly any trades happening, they don’t know what to do.
The current lockdown has effectively crippled the black market and it’s easy to see why. Most foreign currency deals are often conducted face to face and that is kind of hard to do right now as a lot of people have had their movements restricted. Generally you are supposed to stay within a 5 km radius.
Most foreign currency comes from ordinary individuals usually these people get it from their relatives who live abroad in the form of remittances. In essence a lot of the forex we see being traded is crowd sourced.
The crowds are gone and the cash has been scattered with them. We have seen desperate efforts by some to create locale based groups that cover surbubs and are likely to fall within the 5km limit but that just limits the market.
The rates we are seeing reflect this disjointed market. Whoever is desperate gets the short-end of the stick in such deals. If you are desperate to sell, expect a very low rate closer to $35ZWL and if you are desperate to buy expect a rate closer to $41 ZWL.
Again this is based on what we are seeing in some WhatsApp groups. In fact to prevent fragmentation and chaos some groups are now admin only on WhatsApp as traders reel.