Zimbabwe dollar cash rate soar…..as Ecocash dealers dictate market

The high demand  (ZWL$)  represented by bond notes (which was declared sole legal tender) has pushed the rate of acquiring cash  through Ecocash transfers to rise to at least 28% and 30 %  for bond notes and coins respectively.

It was pegged at between 20% and 25%.

This has seen some retailers refusing to accept electronic payments and plastic money preferring  only hard cash for profiteering purposes.

The major culprits are fuel stations which are cashing in on the ‘new black market’ of the Zimbabwe dollar by demanding cash payments and later sell the same at a premium rate via electronic transfer chiefly Ecocash agents.

“Cash is king, petrol attendants are burning cash via Ecocash charging between 28% and 30% and   making profit for themselves.

“Some service stations are  making ZW$70 000 per day in cash then they sale the cash through Ecocash ‘cash out’ transactions at 30% which is the black market rate, this means they get 21 000 profit in a single day. 

“They then make  electronic transfers to the bank to justify the amount of petrol sold in a day in case ministry of energy officials swoop on them and remain ZW$21 000 richer,” explained our source.

“Service stations are supposed to sell fuel to people through plastic money and electronic transfers especially at this current moment were the country is short of cash, they refuse us Ecocash and swipe yet they go behind our backs and burn cash using illegal ways,” lamented a motorist.

This development comes at a time when the government banned the  use of multiple currencies to destroy illegal foreign currency dealings.

However, it seems a new form of ‘parallel market’ has emerged causing a lot of distortions in the ZW$ value.

 Finance minister Mthuli Ncube last month announced that government will print ZWL$400 million bond notes which he said will be drip-fed into the economy to cover the gap left after government banned the use of multi-currencies in local transactions.

He said they will not be printing a new Zimbabwe dollar as it is represented by the bond note, coins and the RTGS dollar virtual currency.

“SI142 (2019) has removed the multi-currency system (US dollar and rand) and there is a gap in terms of paper money and there is a difference between paper money and currency in that

currency is the ZWL$ represented by bond notes, coins and RTGS$,” Mangudya said.

“By printing the ZWL$400 million, we are saying there is need for increase in paper money to replace the gap created by non-usage of foreign currency and we are saying the ZWL$400million will be on a drip-feed basis. And as we print new money, it will also replace the old dirty notes,” he said.