Zimbabwean Vice President Constantino Chiwenga issued a threat against the parallel-currency market traders, becoming the nation’s most senior official to acknowledge the risk that a resurgent black market poses to efforts to revive the beleaguered economy.
“I wish to warn the perpetrators of this heinous crime that the long arm of the law will soon catch up with them,” Chiwenga told business leaders in the second-largest city of Bulawayo. He gave no details on the next steps.
The official Zimbabwe dollar has weakened 6.3% so far this year to 86.90 per U.S. dollar, according to data collected by Bloomberg. It trades at 162 per U.S. dollar, according to marketwatch.co.zw, a website that tracks black-market rates. The local unit’s plunge on the black market often leads to price hikes in the southern African nation, whose annual inflation was 50% in August.
The spread between the official and parallel rate had been stable for about a year since the central bank introduced a weekly auction in June 2020. But it has almost doubled in recent weeks due to payment backlogs that have left companies unable to access foreign currency.
In the past, the government sought to curb the black market by banning publishing of parallel rates and by asking retailers to price transactions at official rates. It has also cracked down on mobile-money transactions in an effort to stabilize the currency.
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