The Zimbabwe Reserve Bank has issued many trading licences to various players including mobile network operators as they try to fight informal foreign currency traders, blaming them for fueling run away parallel market rates.
While the move is very good on paper, yours truly wonders if ever this solution will fix the problem, or we have simply formalized more business players to also come in and harvest the little forex from the market.
The harsh reality that we are denying is the fact that all players that have entered the bureau de change market are simply buyers, mopping up foreign currency in excess, but none of them is officially selling, at whatever rate.
When you allow huge corporates like banks, Econet and other players with strong bank balances to also buy formally, then you must know that the economy is set for a continuous showdown.
The reserve bank has not set any rules pressurizing the same players to sell, should someone really want to buy, so what kind of market are we running, an all mopers league.
What do small players do when they need to restock from abroad or when car dealers get pad in bond notes, and want to import another car to restock, Where must these players go?
This is a very simple question that the government must ask itself every single day and should worry when they make such statutes.
Car dealers, supermarket owners and informal traders are all buying their stock using foreign currency, but when they sell, they collect the bond note , how are they even sustaining?
Who is supplying this vibrant informal sector with foreign currency?
What role must government play to make sure that when these players need foreign currency, they can still find it at a certain bureau de change, going at reasonable rates.
This is the simple solution that they must have put to try and curb run away foreign currency rates in Zimbabwe .
The black market rate has always offered better rates to buy from the streets, but not till banks and Econet upped their game to offer better rates.
This move was celebrated by many as commendable and safe, but seriously, what are we really commending there, formal players officially buying out as well to mop up the forex reserves.
Who is going to balance up the supply and demand equation in a market where everyone is a willing buyer, and the black market is a willing seller.
The prices are not controlled by demand alone ,but mainly supply. When we have a serious short supply of foreign currency, the black market will determine the rates, this is the move that will greatly affect our policy around forex trade rates.
Very soon we will be hearing that banks and mobile networks are economic saboteurs because they would have chosen to remain competitive in their mandate in becoming formal buyers.
These are financially strong buyers with muscles to buy as long as they have a bank balance .
We will soon get to a stage where we formally want to dispose our bond notes and the only [powerful people are those who we have allowed to buy , but buying is not trading , can you please identify institutions responsible for selling as well
This is a ticking time bomb, if not resolved , it will soon explode as our currency is being weakened daily. It is now safer for most people to quickly convert into a stable currency, especially when no one is formally accepting bond notes or RTGS currency to buy.