Forex Dealers Vow Street Return Soon

May 2, 2024
| Report Focus News

ZIMBABWE | Forex dealers have declared their intent to resume street operations in a matter of weeks, despite crackdowns on parallel market currency trading. Numerous arrests have been made nationwide by police since the introduction of the Zimbabwe Gold (ZiG) currency last month.

Initially launched at a rate of US$1 to ZiG13.56, the ZiG rate has since risen to ZiG20 against the United States dollar on the parallel market. Vice President Constantino Chiwenga recently issued a stern warning to illegal forex dealers, cautioning that involvement in the trade could result in severe consequences.

Interviews conducted by NewsDay with various foreign currency dealers revealed their disregard for Chiwenga’s threats. A dealer in Harare stated that alternative trading methods for United States dollars have been devised, conducted discreetly to evade detection.

Another dealer emphasized that the issue of illegal forex trading persists due to unequal access to US dollars between the wealthy and the impoverished. He stressed that until equitable access to US currency is ensured, the problem will persist.

Claims of police officers accepting bribes from money changers upon arrest were made by some dealers, though Zimbabwe Republic Police (ZRP) spokesperson Assistant Commissioner Paul Nyathi denied these allegations.

Economist Gift Mugano attributed exchange rate volatility to government actions rather than money changers. He criticized the government’s approach to financing infrastructure and highlighted systemic issues within the Treasury as contributing factors to the prevalence of illegal forex trading.

Since the introduction of the multi-currency system years ago, illegal foreign exchange trading has become increasingly common, fuelled by disparities in currency availability and usage across various sectors of the economy.