Cashiers at the Vehicle Inspection Department in Eastlea, Harare were this morning reportedly rejecting local Zimbabwe dollars demanding the United States Dollar for services.
NewsDay Zimbabwe reports that the cashiers had received a “directive from above.”
Meanwhile, scores of people seeking to sit for provisional driving licence tests were left stranded, as authorities claim that they have been ordered to stop taking booking payments over an ‘unresolved’ currency dilemma.
The cashiers were rejecting Zimbabwe dollars around 8 am.
This is happening as the southern African country is facing a huge scarcity of foreign currency.
Impact of the development:
High demand for the USD will result in the Zimbabwe dollar losing value further, reversing some relative stability experienced in recent weeks.
The business sector will likely reject the Zimbabwe dollar too.
Causes of Forex Scarcity:
Zimbabwe has over the years experienced challenges in attracting foreign currency to the financial sector. Imports are improving but are still insufficient to sustain the local economy.
The local industry is collapsed which means businesses have to import commodities to meet local demand. Imports require foreign currency.
This has created a sustained foreign currency shortage in the economy where producers have to rely on the parallel market for liquidity to import essential raw materials and pay for external obligations.