The Zimbabwe reserve bank, which has also closed the stock exchange over forex concerns, has hit people already losing livelihood options during the Covid-19 lockdown hard, writes Sikhululekile Mashingaidze
The Zimbabwe reserve bank, which has also closed the stock exchange over forex concerns, has hit people already losing livelihood options during the Covid-19 lockdown hardPeople queue outside a bank in Harare, Zimbabwe. Picture: REUTERS/MIKE HUTCHINGS
On June 23, the RBZ then introduced a foreign exchange auction system , which resulted in a move from a fixed exchange rate on the interbank market, which had, since March, been pegged at one US dollar to 25 Zimbabwe dollars . After the introduction of the FEAS, the US dollar is now officially trading at 57 ZWL, against a black-market rate of between 80 and 100 ZWL.
That said, the RBZ must not lose sight of its contributory role to this crisis through its management of the nation’s banking system that led to the liquidity crisis in the first place. This birthed and nurtured the mobile-money system that has since spiraled off its radar and, hence, out of its control.
Further to this looming ZSE national catastrophe, the repercussions of which are yet to fully play out, is the plight of citizens already burdened by a loss of livelihood options during this indefinitely extended Covid-19 lockdown, that is most concerning. For the few that are banked, the protracted liquidity crisis has seen citizens brave endless days and nights in long, winding queues in an effort to secure limited withdrawals each week. It is not unusual to leave the bank empty-handed even after dedicating oneself to these queues.
Last Friday’s announcement is evidence of a huge climbdown by the RBZ. Mangwana retweeted the climbdown with no hint of irony. This announcement has the potential to decimate what is left of Zimbabwe’s meagre economy and points to a governance system that has failed to subordinate itself to the rule of law.
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