Parallel market rates plunge to all-time low
EXCHANGE rates on Zimbabwe’s parallel market for foreign currency
plunged to eight-month lows of $1 700 against the United States dollar
because of increased demand for hard cash, according to forex dealers.
The dealers said the rates had been stable at between $1 200 and $1
300 against the American greenback since November, when the government
announced tough new exchange control measures.
However, the rates depreciated this week against increased demand from
the country’s energy utilities, the National Oil Company of Zimbabwe and the
Zimbabwe Electricity Supply Authority.
The two parastatals jointly require more than US$240 million (Z$198
billion) to urgently finance fuel and electricity imports.
Analysts said the Zimbabwe dollar could slip further because of
continuing foreign currency shortages, which have not improved despite the
opening of the tobacco auction floors at the end of April.
Tobacco output has fallen because of drought, input shortages and
instability in the agricultural sector caused by a controversial government
land reform programme.
Farmers have delivered few bales of tobacco to the auction floors
because of the acute shortage of fuel.
Others are still grading their crop after planting late.
Foreign currency dealers said confidence in the local currency had
also been knocked by the failure of Zimbabwe’s main political parties, the
ruling Zanu PF and Movement for Democratic Change (MDC) to commit themselves
to dialogue on the country’s political and economic crises.
Attempts by regional leaders to facilitate the resumption of talks
between the two parties failed, with neither seeming to be willing to climb
down from the tough public stance they have adopted.
“There is nothing on the group suggesting the local currency could
pick up. All we are seeing and getting are negative signals that can’t help
anything,” a Harare analyst said.
Nesbert Tinarwo, chairman of the association that represents bureaux
de change associations that were banned by the government in November, said
the closure of the bureaux had worsened hard cash shortages.
He said forex dealers were no longer able to tap into other sources of
foreign currency, such as cross-border traders and the diplomatic community.
Finance Minister Herbert Murerwa banned bureaux de change in November,
accusing them of contributing to foreign currency leakages.