OWN CORRESPONDENT, Harare | Tuesday 12.15pm.
ZIMBABWE’S foreign exchange market opened to a continued shortage of hard currency on Tuesday, with traders saying there was no sign of improved liquidity in the absence of huge inflows.
”The market is in a tight spot because the inflows are very limited while demand remains high,” said one trader. ”There is very little trade going on.”
The Zimbabwe dollar was quoted artificially steady at 37,9/38,0 to the US. dollar, where it has been anchored at since June under bankers’ informal controls set up in January over fears that President Robert Mugabe’s government would impose stricter controls after the currency’s 50% fall in 1998.
The currency’s artificial stability despite the currency shortage has created a parallel market in which exporters are demanding a higher rate of around 45,5 to the US for their money, traders say.
The Bankers Association of Zimbabwe denies there is a black market but say some businesses are desperate.
Against the rand, the Zimbabwe dollar was also quoted unchanged at its overnight level of 6,16/19 but was weaker versus the euro at 39,43/55 from 39,42/50.
Finance Minister Herbert Murerwa and the local central Reserve Bank have said there was an artificial shortage of hard currency because Foreign Currency Account (FCA) holders were not releasing their money onto the market for speculative purposes, hoping to cash in on any devaluation.
The central bank says it sees no need for any devaluation. — Reuters