On the 24 of June this year the goverment introduced a Statutory Instrument which made the Zimbabwean dollar the sole legal tender in Zimbabwe. This efffectively banned people from using other currencies such as the Rand, Pound and USD for domestic transactions.
The main goal of the statutory instrument was to clamp on the foreign currency black market that had taken root and was thriving. It seems the government has failed.
The black market is still very much and thriving. The President had this to say on the issue:
You have mentioned the issue of money changers selling our money to the people; yes, we see that on TV and we are still asking ourselves what we can do to deal with that. It is something that we are still looking at.President Emmerson Mnangagwa at a recent Zanu PF meeting
Why the black market still exists
There are usually two reasons why a black market exists and all have to do with government policy:
- The formal market fails to meet demand. Zimbabwe’s Interbank rate operated by the banks and bureau de changes is pretty much dry
- The black market still offers a good rate while banks continue to offer lower rates coupled with bureaucracy where you have to have an account with them, they do not offer cash etc.
All these are problems of the government’s own making and are unlikely to be solved soon.
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