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Money changers hit hard by new Rbz rules

They don’t know what has suddenly hit them.

It is no longer business as usual for most, if not all, illegal street money changers.

They used to call the shots in the last few months, determining the prices at which everyone would buy goods and services.

Clearly, they were buying and selling money on behalf of some well-oiled characters, given the top-of-the-range vehicles that religiously delivered US dollars and wads of Zimbabwe dollars to them each morning.

The street money changers lived large and would start eating as early as 7am.

Their lunch hour was not the usual 1pm to 2pm – anytime was lunch time, and the fast food outlets near the places they operate from were busy all day.

Yesterday, Mr Blessing Marezva sat almost hopelessly, on the edge of folded cardboard boxes at the corner of Sam Nujoma Street and Robert Mugabe Road in Harare, outside the imposing Eastgate Mall.

Eastgate Mall is one of the famous malls in Harare where those that pass through it, mostly for the first time, do not think twice before grabbing selfies, especially by the water fountains.

Equally, the southern and western pavements outside the mall have come to be known as “one big bank” without walls since around 2007.

Together with the Market Square and Copacabana Commuter Bus Terminuses, the former Ximex Mall and the area around Roadport Terminus where cross-border travellers get their buses to regional destinations, these places have become major centres for illegal forex dealings.

But following sustained loss of value of the Zimbabwe dollar in the last five or so months, the RBZ hopped from one intervention to the other in search of solutions to tame runaway inflation. Some of the measures have not been resounding successes, managing only to stem the tide for a couple of days.

However, the raising of interest rates to a whopping 200 percent has made it difficult for many people to borrow for speculative purposes.

What is viewed as a masterstroke by many, in dealing with foreign exchange instability and by extension price increases, has been the introduction of gold coins on July 25.

Almost 20 days after the Reserve Bank of Zimbabwe unleashed the gold coins onto the market, forex rates and prices have been stable.

The interest rate rise dried up one source of local currency being fed into the top of the black market and the gold coins have mopped up almost $4 billion of local currency that would probably also have entered the market.

As a result, the traders lower down the pyramid at the street level are short of local currency when people come to sell their small denomination of US notes.

If anything, top retailers such as Pick n Pay and OK Zimbabwe have been competing to offer reduced prices to their customers.

As prices and forex rates stabilise, at least for now, illegal street money changers have become less and less busy.

Some are now uncertain about their future on the streets, as they depended on the suffering of citizens to feed themselves and their families. From rates of around $900 for US$1, the rates have come down marginally to between $800 to $850 per US$1 when buying forex from the street dealers.

When selling your US dollars, the dealers pay $650 to $670 for US$1 in electronic transfers, but a lot less when the customer wants cash.

Said Mr Marezva: “The Government seems to have tightened up things these days. Getting float (money into bank cards and mobile money accounts) is no longer easy these days. Some of the people that used to supply us with Zimbabwe dollars stopped about a week ago saying they have challenges getting it.

“Even on a day you get a bit of local currency, very few people come to change. The previous month end was so dry that if it remains like this for the next two weeks, many money changers are weighing their options.”

Another trader who gave her name as Ms Fildah Hove, said: “All is not well at the moment. I just come, like my colleagues, and sit hoping to get some clients.

“Business is low at the moment. We have low supplies of the local currency, which is what gives us a lot of business as we transfer to our clients via mobile money or Zipit.”

So bad is the situation that a dealer, one of those that prey on people getting into supermarkets and offering them ATM cards or mobile money transfers, was stunned to be told that the card had failed to process a payment of $10 700.

“My sister, the machine says your card has insufficient funds,” shouted the potential forex customer who was making a payment in Pick n Pay Jason Moyo Branch in Harare on Thursday evening. The lady paced furiously into the shop and as if in doubt, asked the till operator to “try again”.

The response was the same, that there was insufficient balance and efforts were made to deduct $5 000 from the card, but again, there was insufficient balance.

Even $3 000 could not be deducted and the customer was getting increasingly impatient.

Four street currency dealers were then called in, each to contribute whatever they had, so that the customer could pay and go.

Almost in unison, all the four lady street currency dealers said: “Things are not well. We will be off the streets soon if nothing dramatic happens.” Only one woman who declined to be named, who was operating near OK Zimbabwe’s supermarket at the corner of Patrice Lumumba Street and Robert Mugabe Road yesterday, said while exchange rates have not been going up since the coming in of gold coins, her business has remained sound.

“I still have many people who come wanting US dollars from me and while I may not have as much money as in the past, I am still in the game,” she said.

The woman then turned interviewer, wanting to know more about gold coins and how sustainable their coming in would be on prices and forex rates.

As the street dealers mourn and ponder about their future, consumers are beginning to smile, hoping the stability continues for the foreseeable future.

It may be too early to write epitaphs on the graves of street currency dealings, because in 2009 when multiple currencies were first adopted, the dealers vanished for a moment, but found a way to resurrect their operations.

With 4 475 Mosi-oa-Tunya gold coins bought in the last few weeks, helping to suck out excess liquidity from the market, low income earners can afford a smile.

And RBZ Governor Dr John Mangudya has the onerous task of broadening these smiles.

Small gold coins are set to be introduced in November to include as many people as possible in investing in the alternative platform as opposed to US dollars, and pulling local currency out of the small wallets as well as the large accounts, generating hope that the obtaining stability will continue. Herald

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