Money changers in temporary strategic retreat

The majority of illicit money changers, also referred to as “Osiphatheleni,” have left their customary trade locations after the government introduced Zimbabwe Gold (ZiG), a new currency backed by gold.

The Reserve Bank of Zimbabwe’s (RBZ) foreign exchange reserves, along with the amount and value of precious minerals, mostly gold, will support the new currency.

The nation’s new currency, the ZiG, was revealed last Friday by Dr. John Mushayavanhu, the recently appointed governor of the Reserve Bank of Zimbabwe. The announcement was made as part of a series of comprehensive policy measures aimed at addressing exchange rate volatility, reducing inflation, and restoring long-term macroeconomic stability.

The newly appointed head of the Central Bank announced in Harare that the Apex Bank was adjusting its monetary policy framework to address the current state of price and exchange rate instability in the economy.

The exchange rate and inflation volatilities experienced in the economy continued to threaten the prospects of the local currency under the multi-currency system, hence the coterie of proposed new measures in the MPS, including the new structured currency.

In interviews, illegal money changers said there was uncertainty in their business following the introduction of the ZiG. A majority of them have not been trading since Friday last week.

A Chronicle news crew yesterday took to the streets and observed that there was no activity in popular spots synonymous with illegal money-changing businesses.

Money changers said they were only conducting business transactions in US dollars and South African rand.

The handful of Osiphatheleni could be seen milling around their usual spots.

They said the announcement of the monetary policy statement took them by surprise, rendering their business irrelevant.

“Since the announcement of the new currency, most of us have had to wait for financial institutions and service providers to reconfigure their systems to encompass the ZiG. Since Friday, we were literally doing nothing,” said a money changer who declined to be named.

Another money changer, who also preferred to remain anonymous said he was optimistic that once systems are reconfigured it will be business as usual.

“Nothing has changed and the game is still the same. For now, we just wait for the systems to be reconfigured to suit the ZiG and then we will be back on the streets,” he said.

Another money changer who only identified himself as Thabo operating near Bootleggers Bottle Store said some companies have already standardised the multi-currency rates.

Most people who had RTGs in their accounts were left stranded after shops and other service providers across the country stopped trading in local currency, as financial institutions were migrating to the ZiG.

The unveiling of the new currency is part of a comprehensive economic reform initiative aimed at addressing ongoing challenges and stabilising the economy.

Financial institutions as well as service providers have since been ordered to upgrade and convert their systems to accommodate the new currency.

This is seen as a significant milestone in Zimbabwe’s economic journey, highlighting the Government’s commitment to promoting economic growth and stability.

Several service providers such as banks and mobile money transfer agencies alerted their clients of the new development and are still seized with reconfiguring their systems. Leading mobile telecoms service provider EcoCash yesterday said it had completed the conversion process.

“We are pleased to advise that EcoCash services have been restored. You can now transact on USD & ZiG,” reads a message sent to millions of subscribers by the company. Following the notification, some mobile money users were able to check their converted balance.

Wrote FBC Bank to its client: “We are progressing well in converting ZWL to ZiG on our banking system. Functionality tests are underway. Meanwhile, all USD platforms are now up”.

RBZ Governor Dr Mushayavanhu had given mobile network operators up to yesterday to ensure that all of their customers effortlessly transition from ZW$ wallets to ZiG wallets.

He further directed that once the local currency is re-denominated ZiG, all domestic traders are expected to consistently modify their pricing strategy to account for the currency reforms from the RBZ.

Dr Mushayavanhu gave all entities, other than banks and mobile network operators (MNOs), a seven-day ultimatum from last Friday to complete the configuration of their systems to conduct business in ZiG.

Most shops and other formal business entities in Bulawayo were still transacting in United States dollars and South African rand for goods and services as they were still synchronising their systems with the new gold-backed local currency.

Chronicle established that big retailers such as OK Zimbabwe, Pick n Pay, and Edgars Stores Limited were inundated with clients seeking to make payments through local currency swipes, only to be told that only clients with United States Dollars were being served.

In Beitbridge, the currency change has not affected the movement of people through the border post as travellers largely depend on the South African rand for their cross-border related businesses.

Regional immigration officer in charge of the southern region, Mr Joshua Chibundu, said they were yet to note any changes in the movement of traffic through the Beitbridge Border Post since Friday.

“It is business as usual; we haven’t seen a change in the movement trend,” he said.

Most money changers in the border town were largely dealing in US dollars and rand transactions.

“For now, we are converting either the rand into US dollars or vice versa only until there is closure on the newly introduced currency issue. However, we haven’t felt the change considering that we are in a rand economy in this town where the rand is the largest currency of trade,” said a money changer who declined to be named. The situation was the same in most shops with consumers buying goods and commodities in rand.

In a statement on Saturday, RBZ said the banking sector and payment systems providers had made satisfactory progress in converting the ZW$ balances into ZiG balances since the pronouncement of the Monetary Policy measures on Friday.

“The conversion process will continue for other economic sectors until Friday, 12 April 2024. Thereafter, the Reserve Bank expects that all the online payment platforms will be operating smoothly for all transactions in the economy.

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