Zimbabweans rush to sell foreign currency
Friday, November 29, 2002
world.scmp.com
JEN REDSHAW in Harare
Anxious Zimbabweans have been selling their stocks of foreign currency ahead of this weekend's forced closure of exchange bureaus.
President Robert Mugabe's government, crippled by a lack of foreign currency, has ordered that all exchange bureaus cease operating by tomorrow.
It wants foreign currency to be traded on the official market, at rates around 30 times lower than those of the parallel market.
Behind the blackened windows in the Dragon Bureau de Change on Harare's Nelson Mandela Avenue this week, customers sat on the window ledge for lack of space. Four women haggled over the exchange rate and returned from the counter with a plastic bag full of red and white 500 Zimbabwe dollar notes, which they carefully shared.
The sudden inflows on to the currency market have contributed to a drastic drop in buying prices. Before newly appointed Finance Minister Herbert Murerwa's announcement this month that exchange bureaus would be abolished, one US dollar (HK$7.80) was selling for as many as 1,800 Zimbabwe dollars.
By Wednesday, that rate had fallen to 1,000 Zimbabwe dollars. The official rate - still displayed prominently on boards within all bureaus - is 55 to one.
Ethel, a teller in another backstreet bureau, says the fall in rates is because everyone is selling. "But here is my phone number so you can contact me after this weekend [if you want to sell any foreign currency]," she added.
A Bulawayo-based lecturer in banking told state ZBC television: "Speculators are now offloading what they have. There is now an increase in supply in foreign currency [and] there is a fall in the price of the US dollar."
In what appeared to be a move to fuel the selling panic, the state-controlled Herald newspaper announced on Tuesday that rates had fallen as low as 600 Zimbabwe dollars to one US dollar.
But by midweek, the rush on the bureaus had lessened as disappointed customers held on to their currency in the hope of better deals in the future.
The cash-strapped government says that the closure of exchange bureaus is intended to "bring about sanity and discipline within the sector".
While large sums of foreign currency are rarely traded through these offices, many working-class Zimbabweans depend on them to change the smaller denominations that friends and relatives working abroad send home.
Rising prices - inflation is now running at more than 144 per cent - mean that a US$10 note, received regularly, is a lifeline for many Zimbabweans struggling to make ends meet.
But Mr Mugabe, who this month said he got "headaches and stomach aches" from trying to figure out how to buy fuel from outside the country, is determined to stamp out all illegal foreign currency transactions.
Prominent ruling party legislator Phillip Chiyangwa said: "There is going to be measures taken whereby you are arrested on sight if you are seen with a greenback."
Analysts say the closure of the bureaus will merely force the parallel market underground, causing exchange rates to soar.
Police have vowed to stop the black market moving to "homes and street corners".
Police spokesman Augustine Chihuri said on Wednesday that those found with large sums of money suspected to have been acquired through illegal exchange deals would be arrested.
Meanwhile, in signs of tightening dictatorial control, Mr Mugabe invoked harsh media laws on Wednesday to expel the last European reporter from Zimbabwe.
Agence French-Presse's Harare Bureau chief Stephane Barbier has been given until tomorrow to leave the country after the government refused to renew his work permit.
Barbier's senior correspondent, Griffin Shea, was recently ordered out of Zimbabwe.
Other European journalists have already been forced to leave the country. |
