The Reserve Bank of Zimbabwe appears to have shot itself in the foot in moving last month to shut down money transfer agencies. The interbank foreign exchange market data show a 17.7% decline in hard currency sales from September to October, when they totaled US$13.5 million, and a 10.5% fall in forex purchases to US$15.3 million.
Economists attribute this contraction in foreign exchange trading volumes within the Zimbabwean banking system to the crackdown on the money transfer agencies.
Reserve Bank Governor Gideon Gono ordered 16 transfer agencies to halt operations early last month, accusing the private companies of engaging in “deviant behaviour” in directing funds from Zimbabweans abroad into the local currency black market.
Economist Isaac Kwesu of the graduate school of management at the University of Zimbabwe told reporter Carole Gombakomba of VOA's Studio 7 for Zimbabwe that the closure of the transfer agencies along with a slump in the value of the Zimbabwe dollar and a dearth of foreign direct investment were all factors at play.
In Bulawayo, meanwhile, the availability of hard currency has tightened for another reason: ruling party youth militia known as the Green Bombers have launched an offensive against black market currency traders, virtually halting dealings.
The ZANU-PF militia have focused efforts on a downtown area where forex dealings are so common local residents call it the World Bank.
Sources said the youth militia were being paid generously by the central to carry out the blitz - as as much as Z$150,000 or US$600 a week depending on the work.
The Zimbabwe dollar, meanwhile, has continued its freefall on the parallel market and was last trading around Z$180,000 to the U.S. dollar.
Reporter Chris Gande of VOA's Studio 7 for Zimbabwe interviewed a parallel market currency trader in Bulawayo who spoke on condition of anonymity.