Yesterday the black market rate opened at a tame $14.00 in the morning as the events of Friday afternoon weighed heavily on the rate. However, as the day progressed the rate started to rise steadily to reach an average of $15:00 per 1 USD. By the close of day on Monday dealers were willing to pay about $16:00 Ecocash per 1 USD according to data by Marketwatch and Bluemari.
According to data by Bluemari yesterday’s rates were as follows:
- RTGS: USD Black Market $16.00
- RTGS: Pound Sterling Black Market $17.90
- RTGS: USD official $14.90
Markets rally after an eventful weekend
It’s the talk in town and pretty much every publication. In a frenzy of madness and frantic bidding, the ZWL: USD rate rose to reach an alarming $23 ZWL: 1 USD last Friday before it fell like a rock once news of how the RBZ’s Financial Intelligence Unit (FIU) had instructed banks to freeze accounts of suspected black market players.
President Emmerson Mnangagwa even had something to say about this:
On the monetary side, yes, we introduced the one currency. For six or eight weeks, it remained stable, but then our people are very intelligent. We have people who find ways to fight that and undermine (the currency), but yesterday we also became smarter than their being smart, so we took some action.President ED Mnangagwa on the freezing of the Sakunda et al accounts
When markets trading started on Saturday in the aftermath of the account freezing, traders looked to the OMIR and Interbank rate for guidance. For weeks the black market rate had been well above the OMIR which prompted some people to say that this was a bubble.
However, it seems the OMIR is now on a quest of its own. As of yesterday, it stood a good $5 above both the Interbank and black market rates at $20.52. This has prompted some hardliners to call for the government to do something about it.
To be fair though we think such calls are stemming out of ignorance. While the OMIR might seem strange it is important to point out that the Zimbabwe Stock Exchange has had a bullish week. In fact, it has been on a bullish week for a while as investors sought a safe haven given the volatility of the local currency.
The climbing OMIR is also a strong indicator of investor jitters. A while back the government neutered the fungibility of Old Mutual shares. Now investors have to wait 90 days before they can dump their shares at another exchange in return for hard currency. The rising-rate implies that investors are so afraid of what is happening in our local economy to the extent that they are willing to wait 90 days to get their money out. That is pretty damning.
Leave A Comment