After evading police arrest last week, 34-year-old James, an illegal foreign exchange dealer based in Harare, is still in the game and has devised other means of trading US dollars amid a crackdown on forex trading in the parallel market. .
Police recently arrested 65 suspected foreign exchange dealers, as the new Zimbabwe gold coin (ZiG) showed early signs of fragility in the parallel market.
The ZiG coin was launched early this month when Reserve Bank of Zimbabwe Governor John Mushayavanhu issued his inaugural monetary policy statement and pegged it at a rate of US$1 to ZiG13.56.
However, the parallel market exchange rate jumped to ZiG20 against the US dollar in just a few weeks, causing new headaches for the government while exposing the government’s apparent gullibility in dealing with the old currency turmoil.
By Friday last week, police had arrested more than 100 suspected foreign exchange dealers, and traders deserted the streets for fear of arrest.
Their fears were exacerbated by Vice President Constantino Chiwenga’s threats against foreign exchange traders.
He said that buying and selling zigzags in the parallel market is a criminal offense similar to selling gold.
NewsDay interviewed several forex traders who dismissed Chiwenga’s threats.
“We are all in this mess together. The police can come to assault us because of Chiwenga’s directive, but after work they will come to us and ask for US dollars,” said a foreign currency trader in Harare.
“We are not on the streets but we now have other means of trading and it can be done over a phone call and what we do does not appear on the sidewalks because now we are careful in everything we do.”
He vowed to return to the streets.
“In a few weeks we will be back on the streets again,” he said. “We are just like the vendors and we also want to earn a living.”
Another forex trader said the government should ensure that the rich and poor have access to US dollars.
He said the demand for US dollars has since increased after their colleagues were arrested.
“If the government wants everything to be normal, everyone should now have access to US dollars no matter how rich or poor they are.
“If you want to look at it, the US dollar only circulates among the rich, so that’s why it’s difficult for most people,” he said.
Illegal foreign exchange traders said they would remain important in Zimbabwe as long as ordinary people could not access foreign exchange in banks.
They also revealed that the police detail required murder Money from some illegal traders after arrests were made.
“Whenever there is an operation like this, there are people who will benefit, and there are some police officers who take bribes from some money changers when they are arrested,” they said.
However, national police spokesperson, Assistant Commissioner Paul Nyathi, denied the allegations challenging people to report any details to the police relating to soliciting bribes.
“I am not aware of this, and people with evidence should come forward so we can conduct our own investigations,” he said.
Economist Gift Mugano said the government was targeting the wrong challenges.
“I don’t want to sound like I’m fighting for the black market. The biggest challenge we face is the treasury that pumps liquidity into the construction business.
“If you arrest the money changers in Copacabana you are not doing anything. These people are out of work and the government is identifying the wrong man.
“The wrong man is the Ministry of Finance, which is using the wrong model for infrastructure financing. “You can’t finance infrastructure with money.”
“The cashiers at the road port are just part of the ants on the mountain and the mountain is the treasury.
“Do you think the government has enough police to arrest seven million people because almost everyone is transferring money in the parallel market?”
Another economist, Prosper Chitambara, said confidence-building measures would determine ZiG’s success.
“People should trust their currency as well as the institution that manages the currency. If this trust was built we would not see all these problems that we are facing.”
Political analyst Rijois Ngwenya said the arrest of foreign currency traders was treating symptoms and not problems facing the economy.
“They need to make sure they have money if they are arrested [money changers] They will keep coming back when there is hyperinflation.
“The government must ensure that funds are available in the bank otherwise foreign exchange traders will eventually come back,” he said. Newsday
