The Reserve Bank of Zimbabwe (RBZ) is planning policy interventions that will “surprise” the market as it tries to reign in on “speculators” who are devaluing the Zimbabwe dollar.
Recently, the RBZ demanded tighter controls and threshold limits on the perceived speculative activities by licensed money transfer agents that included mobile money operator platforms and bank systems.
A member of the RBZ monetary policy committee, Eddie Cross, said the Central Bank will not make a comment at this time but will ambush the speculators. Said Cross:
It is very difficult to make a coherent comment on what is going on right now and for most of the stuff going on we have to be very careful because we do not want the market to understand what we are currently doing because much of the action has to be done by surprise.
This is a massive speculative storm, let us call it that hey, it is drawing real money out of the system, which is detrimental to the productive sector and constitutes the transfer of assets, real wealth from people with savings and people on fixed salaries, people in the productive sector to speculators and traders.
While authorities have blamed speculators and “cash barons” for the depreciation of the local currency since its reintroduction last year, economists believe that confidence crisis, speculation, policy shortcomings and the domestic economy’s current structural challenges are responsible for the Zimbabwe dollar’s loss of value.
The RBZ has fixed the official rate of the domestic unit at 25 to 1 against the US dollar but on the parallel market, it is trading as high as $70 to the greenback.