A volatile foreign exchange crisis that began earlier in the week, yesterday subsided with rates coming down to $16, by last night, after peaking at $25 to the US dollar by Thursday.
The sharp rise in the exchange rate and an inexplicable rout of the local unit caused a spike in prices of goods and services as most traders claim they peg prices against the US dollar.
Both Finance and Economic Development Minister Professor Mthuli Ncube and his permanent secretary Mr George Guvamatanga could not be reached for comment last night on what triggered the volatility in exchange rates, as they were not picking their mobile phones, amid wide speculation on social media and on street corners.
Reserve Bank of Zimbabwe (RBZ) Deputy Governor Dr Kupukile Mlambo was also not answering his phone.
However, the market was awash with rumours that the RBZ had cracked the whip on bureaux de change and firms, thought to be fuelling the runaway exchange rate. A statement purportedly from the RBZ circulated widely on social media yesterday suggesting the apex bank had moved to freeze the accounts of some companies.
The Herald could not immediately verify the authenticity of the correspondence directed to banks.
Economic commentator Mr Langton Mabhanga told The Herald last night that the precipitous decline in parallel market forex rates yesterday could have been caused by the RBZ’s intervention.
“I think the RBZ stepped in to tame the jungle and instil discipline in the market,” said Mr Mabhanga.
University of Zimbabwe (UZ) economics lecturer Mr Tamuka Joel Mukura suggested that whoever was feeding onto the market could have bought enough US dollars, hence the decline in rates.
He said “speculation” that some companies were buying money to import raw materials ahead of the 2019-2020 agriculture season could have pushed up the rate.
Mr Mabhanga suggested the recent spike in parallel market rates, since the introduction of a single currency, “can be explained at two levels”.
“At a strategic level, this may signify the turn of the Transitional Stabilisation Programme (TSP) curve,” said Mr Mabhanga.
“The economy could now be begging for a successor programme that ramps the economy from transition to growth, with particular focus on mining and agricultural production, from artisanal or village level to commercial scale, respectively.
“These will hasten prospects for an export-led economy. Meanwhile, we need to continue to leverage the gains of the TSP for an impeachable springboard to growth mode.”
Mr Mabhanga said while there could need for closer collaboration and correlation with the Bretton woods institutions, the World Bank and the International Monetary Fund, and related global financiers, the future must be concentrated with “more inward looking resource exploitative strategies and home grown policies that place at the core internal resource mobilisation”.
Mr Mabhanga said the second level was the operational level of ensuring discipline, consistency and all market elements working together to ensure urgent stabilisation of the mono-currency.