It’s no secret that Zimbabwe’s illegal foreign currency has been on the radar of the authorities ever since the return of the Zimbabwean dollar. Authorities both monetary and fiscal have blamed speculators on the underground market for manipulating rates and causing the local currency to collapse. In recent weeks the central bank’s Financial Intelligence Unit has promised to “surprise” these speculators.
During an interview with the state weekly, Sunday News, Governor Mangudya had no kind words for the illegal forex market:
What is lacking is self-discipline. We need to make sure we produce for the economy so that we become self-sufficient. The behaviour of selling money is not conducive for economic growth. There is no economy that has grown by selling money to get money. Let us have national interest. We have to be patriotic and develop national ethos that is good for the economy.RBZ governor speaking to Sunday News
The governor must share the blame
While its true that the foreign currency black market has been causing chaos in the economy the governor and his fiscal principles must share the blame as well. If the country had a functional foreign currency market based on market principles operating under the guise of the central bank we wouldn’t be in this mess.
However, the governor in a spineless move to prop up the government’s wanton public spending and aid them in underpaying the civil populace has maintained a fixed rate of $25 ZWL as to 1 USD. It’s a rate that no one is willing to sell at. A rate which had no rationale whatsoever and was actually lower than the prevailing interbank rate on the day it was introduced.
The only probable reason for such a rate was that the government wanted to ensure that the Zimbabwean dollar would survive. However in doing this they have all but ensured that the Zimbabwean dollar will not survive. Already more and more people, businesses and even government agents are preferring either the bond note or straight up foreign currency.
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