Forex dealers resurface, cite demand 

Source: Forex dealers resurface, cite demand – DailyNews Live

Nokuthaba Nkomo     10 December 2018

HARARE – Forex dealers popularly known as “money-changers” are back on
the streets operating underground as they still claim that there is high
demand for foreign currency now because government is charging duty in
foreign currency.

In recent weeks, forex dealers were largely absent from posts they usually
occupied where currency deals were conducted after new laws prescribing a
maximum 10-year custodial sentence for illegal foreign currency traders
came into force.

Although operating in disguise, some of the money changers have returned
to their usual operating points at Copa Cabana and Eastgate Mall in Harare
among other areas.

Speaking to the Daily News, some of the money-changers said while they are
afraid of the 10-year jail sentence, it’s almost impossible for them to
stop their business as foreign currency is now in demand as the economy
continues on the downward spiral.

One of them said with government demanding duty in foreign currency, most
people have been coming to look for foreign currency as they cannot access
it in banks.

“We are scared that we might be caught and arrested but as you may see,
people are struggling to get foreign currency since it’s not there in
banks. We are just trying to make a living through this business and at
the same time help out those in need foreign currency.

“The demand for foreign currency is now even higher since government said
duty for vehicles should be paid in foreign currency. People are only
trying to survive these tough conditions,” one of the money-changers said

Another money-changer said among the people who come to trade are those
who will be intending to travel to other countries for business or
pleasure especially now that the festive season is upon us.

He said government should avail foreign currency in banks if it wants the
suffering members of the public to stop trading with illegal
money-changers.

Forex dealers deserted their usual selling points after President Emmerson
Mnangagwa said he would bring grief to all those who are involved in the
illegal trade of foreign currency as he tries to bring stability to the
country’s wobbly economy which went into turmoil at the beginning of
October when government introduced unpopular measures.

The country has been experiencing acute shortages of foreign currency
which in previous weeks triggered shocking price hikes, shortages of
essential medical drugs and basic consumer goods.

The central bank holds the official exchange rate at 1:1 US dollar to the
bond note, but the rate is largely only accessible to importers of
essential goods like wheat and fuel, creating major demand for black
market dollars.

Economists, however, recently told this publication that closing in on
money-changers does not help solve the problem that the country is faced
with.

Leading economist John Robertson said the country’s problems are deeper
than government is willing to address.

Robertson urged government to remove the hurdles that are derailing the
country’s progress by accepting that market forces determine the value of
the money used for imports.

“Market forces still dictate that money used to pay for imports is more
valuable than money that has limited uses, so different rates of exchange
will remain until the limitations are removed,” he said.

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