There was chaos on the foreign currency black market starting Friday afternoon in the wake of an RBZ memo that was addressed to banks instructing them to freeze the bank accounts of several companies alleged to be behind the spike in the black market exchange rates.

Rates plummeted from a high of $22 ZWL per USD and most people woke up without an idea of what the day’s rate was, the first time this has happened since 24 June when the Reserve Bank issued directives that had the effect of reintroducing the Zimbabwean dollar and scrapping the multicurrency system.

Rates settle at $15

When people finally calmed down the black market traders did what they have always done in the past; looked at the Old Mutual Implied Rate and used it as a starting point. So we observed a rate of $15 ZWL being used in most foreign currency groups.

Others offered slightly above this while smaller traders offered just below this with $13.50 being the lowest figure we saw being paid for each 1 USD although that trader revised their offer upwards.

Things haven’t changed much this Sunday with most traders offering these very same rates for any amounts above $10. We expect this trend to hold although another factor that might come into play and push rates up is the second directive from the RBZ which instructed Bureau De Changes to only offer rates within 7% of the average interbank rate.

Also part of this directive had the effect of limiting who could access foreign currency from official exchanges as buyers now need to have a valid passport for them to be able to buy foreign currency. It is not clear what effect this will have given the fact that exchanges have been consistent vacuum machines. None of the exchanges we know were selling cash to walk-in buyers anyway.

In any case, the likely effect is that more people will turn to the black market for US dollars pushing up demand and rates there. We are also likely to see a widening gap between the official and black-market rates as was the case before the RBZ removed the very same regulation that they have now slapped back.