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Zimbabwe Exchange Rate Fluctuates Ahead Of Monetary Statement


Rates of exchange between the U.S. and Zimbabwe dollars were being quoted in a wide range Tuesday in Harare and Bulawayo as currency market participants braced for an announcement from Reserve Bank Governor Gideon Gono this week on redenominating the local dollar.

Gono was expected to deliver his quarterly monetary policy statement on Wednesday.

Gono was quoted by the state-controlled Sunday Mail newspaper early this week as saying he would take steps to relieve cash shortages, including removing "more zeros" from notes which now include denominations of up to Z$100 billion.

This could mean Zimbabweans will have to surrender expiring banknotes as they did in such an operation in August 2006 which inflicted financial losses on many ordinary people.

Those holding large amounts of the outstanding currency, especially parallel market dealers, might then rush for the exit, cheapening the local currency against hard currencies.

U.S. dollars were most sought in Harare where the exchange rate reached Z$800 billion to the greenback. In Bulawayo, the second largest city, the price for one U.S. dollar ranged from Z$110 billion to $500 billion in street trading of physical notes.

Black market money changers meanwhile said they suspect their biggest customers of being runners for the central bank, saying such participants at times flood the market with large amounts of cash, driving up the local currency price for the U.S. currency.

One Harare-based black-market foreign exchange dealer, requesting anonymity, told reporter Patience Rusere of VOA's Studio 7 for Zimbabwe that he and other traders have handled new, uncirculated bank notes and even bills still sealed in RBZ packets.

More Reports From VOA's Studio 7 For Zimbabwe...

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