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New $10 notes flood black market

THE new $10 notes that were released into circulation on Tuesday had flooded the black market in Mutare by Wednesday morning, with some illegal foreign currency dealers reportedly getting the notes ahead of banks.

By Tuesday end of day, most banks in Mutare had not taken delivery of the new notes.

On Wednesday, while the banks had received the new notes, they were still issuing coins.

As of yesterday, most of the banks were now issuing the new notes, with long queues observed at the banks.

However, some illegal foreign currency dealers are using the crispy new notes on the black market, with some claiming that they had received amounts ranging from $5 000 to $10 000 from their Harare suppliers and handlers.

In a telephone interview yesterday, Reserve Bank of Zimbabwe Governor, Dr John Mangudya acknowledged the presence of the new notes on the black market, but blamed it on individuals who make withdrawals from banks and channel it to the parallel market.

Dr Mangudya said the black market is now a national problem which needs a holistic approach.

“Our duty is to ensure that there is enough money in circulation. Once an individual makes a withdrawal from the bank, we really can’t control what that person does with the money.

“We increased weekly withdrawal limits from $300 to $1 000 following an outcry from the public that they wanted more cash as they were being charged premiums on electronic transactions.

“We have been closely monitoring money movements and we have realised that individuals are channelling whatever they would have withdrawn from banks to the black market. This also applies to those who have access to Diaspora remittances,” he said.

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Dr Mangudya also said while unfortunate, the black market is turning into a thriving industry in the country.

“I appeared before the Parliamentary Portfolio Committee on Budget and Finance on Wednesday where I made it clear that there is need for the country to boost production and create more jobs. The black market is now an industry.

“We need to have a proper economic reflection and have a productive economy. As Zimbabweans, we should move away from the blame game and work together to revive this economy. We need proper economic strategies to rebuild our industries so that they absorb this labour trading on the black market. The energy we use in blaming each other should be channelled towards maximising production. Negative energy will only take Zimbabwe backwards,” he said.

By lunch time on Wednesday, most of the dealers had run out of the new notes due to the high demand.

With the weekly cash withdrawal limits increased from $300 to $1 000, the forex dealers said this has given the people more leeway to trade.

With civil servants having received their May salaries on Tuesday and yesterday (Thursday), this meant brisk business for the illegal forex dealers as most people visited the black market to buy hard currency or the new notes.

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“The new notes are already on the black market in Mutare.

‘‘Although we got our supplies this morning (Wednesday), we had ran out of the cash by 9am. Most of the dealers had money ranging from $5 000 to $10 000, but it was wiped out by people who want to buy cheaper goods from the downtown grocery shops that prefer cash.

“The increase of the weekly cash withdrawals is also coming in handy as our clients have more money to trade. Those getting Diaspora remittances also prefer to receive cash,” said a dealer who operates close to Bata in Mutare’s central business district.

The majority of financial transactions in Zimbabwe are conducted on mobile platforms, with EcoCash accounting for about 95 percent of the volumes and the remainder by NetOne’s OneMoney.

Recently, the central bank closed several mobile money agent lines that were understood to be fuelling the exchange rate volatility.

Manicaland provincial police spokesperson, Inspector Tavhiringwa Kakohwa, said they are facing challenges in arresting foreign currency dealers due to insufficient evidence.

“Yes, it is common knowledge that foreign currency dealers are on the streets, but we need evidence for us to make arrests. We only arrest if we see transactions taking place between two people.

“We make constant raids on all known black market hot spots, but we end up charging those arrested with blocking pavements due to insufficient evidence. It is everyone’s duty to end the black market,” he said.

Via
Manica Post
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