Government Urged to stop clampdown on forex dealers
Sekai Kuvarika, CEO of the Confederation of Zimbabwe Industries (CZI), told MPs that the current crackdown on foreign currency merchants demonstrates government panic. She emphasized that depending on police measures rather than creating strong policy will not result in long-term solutions.
The setting derives from the authorities arresting and publicly shaming 65 foreign currency traders on Independence Day. This action coincided with the first indications of volatility in the new Zimbabwe Gold (ZiG) currency on the parallel market. On Wednesday, the arrested persons will appear in court for a bail hearing.
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The government claims that street-level foreign currency trading was harming the native currency, sparking a large police campaign against these traders.
During her statement to parliament’s joint portfolio committees on finance and industry, Kuvarika underlined that just arresting street forex traders will not adequately solve the ongoing devaluation of ZiG on the parallel market.
“We urge authorities not to panic as policy takes effect. The challenge of accompanying the policy with the police is that the police can replace the policy,” she said.
“The market will now work with the police instead of the policy.
“They will work to ensure that the police does not catch them. We definitely do not support that we accompany our policies with the police.”
John Mushayavanhu, the new governor of the Reserve Bank of Zimbabwe, established ZiG earlier this month, with a value of ZiG13.56 per US dollar. However, it is currently trading at more than 20ZiG on the parallel market, demonstrating the government’s evident lack of experience in dealing with the country’s ongoing currency issues.
Kuvarika recommended authorities to give the 2024 monetary policy enough time to take effect.
“This is policy inception. Let’s give ourselves time, let’s give the market and policy makers time,” she said.
