Illegal money changers adapt to Zimbabwe’s ZiG currency rollout

A report seen in the East African newspaper, shows that illegal money changers in Zimbabwe are back to business. They had taken time off after the country announced that it would be replacing its Zimbabwean dollar with a new gold-backed currency called the Zimbabwe Gold (ZiG).

Although the new currency is still being printed, these currency changers have decided to get ahead of the situation by offering a slightly higher rate.

Currently, the currency is only available electronically, as the government is still in the process of printing new notes and coins. According to ZB Financial Holdings, the new currency was trading at 13.3437 ZiG per dollar, on Wednesday.

The report indicates that the black market is offering around 15 ZiG (buy rate) and around 20 ZiG (sell rate) to the US dollar.

One of the illegal currency changers situated at the Westgate Shopping Mall, northwest of Harare, Zimbabwe’s capital, noted that he and his cohorts have been weary of law enforcement agents as they conduct their business.

“Our selling rate is $1 to 20 or 21 ZiG depending on the amount transacted, and our buying rate is between 15 and 16 ZiG to the U.S. dollar, also depending on the amount transacted. Those disposing of higher amounts get more favorable rates,” he said.

The launch of Zimbabwe’s sixth currency since independence triggered considerable skepticism in the market, with some alleging that the move was a clever approach to removing some zeros from the inflation-battered old Zimbabwean dollar.

The new gold-backed currency began trading on April 8 at 13.56 to the US dollar as the Reserve Bank of Zimbabwe (RBZ) tried to address the increasing demand for foreign money as a store of value and restore trust in the local currency after months of currency instability.

While it has fared nicely on the official platform, its position in the parallel market is different, with the rate progressively increasing.

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