According to our own survey more and more Zimbabwean traders are starting to reject the Zimbabwean dollar outright citing its volatility and transfer restrictions as the reason. Informal traders at places such as Mbare Musika that used to accept Ecocash and (rarely) ZIPIT are no longer accepting both as the rate has become even more unstable in recent weeks.

Tenge tichitya kunyura plus izvi zvaana Mangudya zvemalimits izvo ndezvekupenga

[We are afraid of making a costly mistake (due to the volatile nature of the currency). We are also wary of the limits and “surprises that the central bank has promised.

One Mbare trader who doubles as an illegal forex trader

The RBZ is flying too close to the sun

Instead of being champions of calm and stability the Reserve Bank of Zimbabwe and its Financial Intelligence Unit have rocked the boat these past few weeks with bans and freezes that have spooked the market and caused some people to shy away from the RTGS dollar. Prior to this traders who like every business in Zimbabwe were selling in US dollars at least tolerated the RTGS dollar but used the premium black market rate when setting prices.

As soon as the day ended these traders would engage their network of runners. RTGS dollars would be divvied up and deposited into each runner’s Ecocash Wallet. These runners would then go onto the black market and compete for the scarce foreign currency that is there. By essential locking down Ecocash and ZIPIT it means that any business that accepts the worthless local currency is stuck with it even as the rate continues to climb.

You cannot buy supplies with it since manufacturers are also now refusing the local currency. Manufacturers need to import raw materials and to do that they need foreign currency. There is no foreign currency on the formal market which dried up when the Reserve Bank of Zimbabwe inexplicably set a fixed rate of 25 ZWL as to 1 USD even after promising that they would set up a free market economy.

The RBZ flew too close to the sun with their bans and limits just like they did back on 2 October 2008 when they banned RTGS transfers essentially killing the old Zimbabwean dollar. A few months later that dollar died and it’s remains decayed into nothing still stuck in those bank accounts.