Zimbabwe News and Internet Radio

Forex dealers resurface, cite demand

By Nokuthaba Nkomo

Forex dealers popularly known as ‘‘money-changers’’ are back on the streets operating underground as they still claim that there is high demand for foreign currency now because government is charging duty in foreign currency.

File picture of forex dealers in Zimbabwe
File picture of forex dealers in Zimbabwe

In recent weeks, forex dealers were largely absent from posts they usually occupied where currency deals were conducted after new laws prescribing a maximum 10-year custodial sentence for illegal foreign currency traders came into force.

Although operating in disguise, some of the money changers have returned to their usual operating points at Copa Cabana and Eastgate Mall in Harare among other areas.

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Speaking to the Daily News, some of the money-changers said while they are afraid of the 10-year jail sentence, it’s almost impossible for them to stop their business as foreign currency is now in demand as the economy continues on the downward spiral.

One of them said with government demanding duty in foreign currency, most people have been coming to look for foreign currency as they cannot access it in banks.

“We are scared that we might be caught and arrested but as you may see, people are struggling to get foreign currency since it’s not there in banks. We are just trying to make a living through this business and at the same time help out those in need foreign currency.

“The demand for foreign currency is now even higher since government said duty for vehicles should be paid in foreign currency. People are only trying to survive these tough conditions,” one of the money-changers said

Another money-changer said among the people who come to trade are those who will be intending to travel to other countries for business or pleasure especially now that the festive season is upon us.

He said government should avail foreign currency in banks if it wants the suffering members of the public to stop trading with illegal money-changers.

Forex dealers deserted their usual selling points after President Emmerson Mnangagwa said he would bring grief to all those who are involved in the illegal trade of foreign currency as he tries to bring stability to the country’s wobbly economy which went into turmoil at the beginning of October when government introduced unpopular measures.

The country has been experiencing acute shortages of foreign currency which in previous weeks triggered shocking price hikes, shortages of essential medical drugs and basic consumer goods.

The central bank holds the official exchange rate at 1:1 US dollar to the bond note, but the rate is largely only accessible to importers of essential goods like wheat and fuel, creating major demand for black market dollars.

Economists, however, recently told this publication that closing in on money-changers does not help solve the problem that the country is faced with.

Leading economist John Robertson said the country’s problems are deeper than government is willing to address.

Robertson urged government to remove the hurdles that are derailing the country’s progress by accepting that market forces determine the value of the money used for imports.

“Market forces still dictate that money used to pay for imports is more valuable than money that has limited uses, so different rates of exchange will remain until the limitations are removed,” he said. DailyNews