Foreign currency rates fall in Zimbabwe

HARARE – Zimbabwe’s foreign currency rates on the parallel market significantly declined yesterday from 70 percent to around 30 percent following an influx of returning Diaspora and rising confidence in the new government.

This means people were by end of day yesterday buying US$1 for $1,30 bond notes compared to a high of $1,70 bond notes on Monday.

Economic analyst Francis Mukora said the decline in foreign currency rates on the black market could be attributed to the fact that most South African industries and wholesalers have closed for their annual shutdown.

What this means is that there will be no demand for foreign currency since no one will be buying goods from South Africa until end of January 2018, he said.

“During the festive season a lot of Zimbabweans from the Diaspora usually visit the country and flood the market with United States dollars, Rands and other currencies.

“What will be in demand will be bond notes and money in banks and mobile platforms such as EcoCash. I don’t see these people using hard currencies when buying in the shops since doing so will be very expensive for them. Imagine buying a kg of meat for US$10 hard cash or imported beer for $2,50 to $3 a pint,” Mukora said.

Market experts also believe that the $600 million Nostro Stabilisation loan from Afreximbank, to be disbursed in the next couple of weeks, will also help keep the rates down.

The loan is earmarked to fund Nostro accounts held with foreign banks whose balances had been exhausted.

This will enable most big companies which have been actively buying foreign currency from the black market to access cheap money from the normal banking systems.

An economist with a local bank said many Zimbabweans from the Diaspora are coming to invest in Zimbabwe in light of the new political dispensation further helping to inject fresh capital into the local market.

“Some will bring hard cash while others will transfer money into the country via the nostro account systems of banks. Already the registrar of companies’ office is very busy with these ‘diasporians’ regularising their company registration documents,” she said.

President Emmerson Mnangagwa, in his inaugural State-of-the-nation address on Wednesday said the new dispensation has rekindled a lot of goodwill and hope for economic recovery, both domestically and internationally.

“We must build on this foundation as we forge ahead for abetter economic future for our nation,” he said, adding that his government was committed to remove any policy inconsistencies to make  Zimbabwe an attractive destination for capital.

%d bloggers like this: