Zimbabwe (Xinhua) -- Black
market in Zimbabwe is gaining popularity as cash
shortages persist, with many people moving onto streets
in search of the now elusive U.S. dollar.
the busiest spots is a trans-border bus terminus to the
east of the Central Business District and around a
shopping mall in the city center, where dealers wave
wads of foreign currency to potential clients.
As at Friday morning, 107 dollars worth of bond notes
were buying 100 U.S. dollars while the same amount of
bond notes fetched 1,200 South African rand.
Other dealers charge up to 15 percent of the needed
cash and require clients to transfer funds
electronically into their accounts before they give them
The U.S. dollar and rand remain the most commonly
used currencies in Zimbabwe.
The Reserve Bank of Zimbabwe (RBZ) introduced bond
coins and notes, which were supposed to trade at par
with the U.S. dollar, between 2014 and 2016 in a bid to
improve liquidity, but the continued flight of dollars
has stirred up public concerns.
The interchangeability of the surrogate currency with
the U.S. dollar remains a thorny issue with only the
banks maintaining it while some retailers and traders
have found subtle ways of charging a premium for the use
of bond notes.
An illegal foreign currency dealer told Xinhua that
many people were coming over in search of foreign
currency for various reasons ranging from financing
their businesses to paying tuition and accommodation
fees for their children who are studying abroad.
"They come here, get their U.S. dollars and go to the
bank where they deposit the money in their children’s
visa accounts," she said.
RBZ in 2016 established a list for foreign currency
disbursements that leaves college fees payments at the
lowest rung of priorities, so the parents have devised
other means to send money to their children, including
using mobile money transfer platforms.
Also falling into that category are cash depositing
clients in the retail and wholesale industry and other
borrowing clients engaged in the importation of
Donations, capital remittances from disposal of local
property and from cross-border investments, funding of
offshore credit cards, importation of goods and services
readily available in Zimbabwe have been declared
As a result of the priority list, the black market
has found ready clients as people go for the elusive
foreign currency, some of which they are reportedly
In a previous interview with Xinhua, economic analyst
Clemence Machadu said it seemed the U.S. dollar now had
sub currencies as the black market took advantage of
"Bond currency may have come as a savior that will
decongest demand for the greenback and ensure that some
domestic transactions happen in bond notes, relieving
the hard currency to meet imports," said Machadu.
"However, the challenge is when it comes to
exchanging bond notes for hard currency by those who may
now want to import more supplies.
"It is obvious that hard currency won’t be
conveniently available and that will create an arbitrage
whereby a premium will be charged to exchange bond notes
for the greenback," he said.
The Zimbabwe dollar became moribund in February 2009
and made way to a multiple currency regime dominated by
the U.S. dollar and, in the initial stages, the rand.
The others are the Australian dollar, British pound,
Botswana pula, euro, Indian rupee, Chinese yuan and
Japanese yen, but these have hardly been in use.
RBZ governor John Mangudya earlier this week blamed
the emergence of the black market on indiscipline and
general lack of confidence in the market.
He said 102 million dollars worth of bond notes and
coins were now circulating in the economy, accounting
for 1.8 percent of deposits in the banks.
The bond notes and coins are supported by a 200
million dollar facility supported by Afreximbank meant
to inject liquidity into the market after the central
bank realized that the country had run short of the U.S.