Reserve Bank of Zimbabwe (RBZ) Deputy Governor, Kupukile Mlambo has expressed deep concern over the spiraling parallel market exchange rate. The parallel market trades the RTGS dollar at a ratio of 1:8 against the United States dollar.
Speaking to the NewZimbabwe.com, Mlambo said that the rates do not reflect bank balances. He said:
When we analyse the amount of money which depositors in the country have in their bank accounts and the rate at which parallel market rates are increasing, really is a puzzle to me.
The balances should be in a position to be cleared and balanced with the amount of foreign currency which has been injected and that which is circulating in the formal systems.
Mlambo added that the RBZ is convinced that black market rates are driven by speculation and would be difficult to sustain going forward. He, however, admitted that there are other factors contributing to the demand. He said:
The current high rates on the parallel market cannot support industries on a sustainable basis and there is no effective demand coming from business for foreign currency at these high rates. As such, the current parallel market rates are merely a reflection of low levels of confidence, speculation, indiscipline and unfair pricing.
Commenting on Mlambo’s remarks, economist Persistence Gwanyanya said:
There is need for RBZ to share a basic understanding with the dynamics in the economy, because people simply choose to do what they want with their money which is not illegal after all.
More: NewZimbabwe