Consumers are feeling the squeeze as prices rise including fuel. The value of the Zimbabwean dollar continues to slide against the US dollar.
Experts say the currency crisis can be attributed mainly to the loss of public trust in the apex bank. In a bid to search for safe alternatives to the local currency in their bank accounts people have been hoarding US dollars causing demand, prices to increase and the Zimbabwean dollar to depreciate.
Today the Financial Intelligence Unit speaks of the abuse of debit cards to facilitate illegal foreign exchange transactions. Card holders approach customers who intend to purchase goods or services in foreign currency and offer the use of their cards in return for foreign currency at an agreed rate, according to FIU.
“In the course of discharging AML/CFT obligations banks are expected to identify and report these transactions as suspicious and in case of repeated abuse close the accounts and report the same to the FIU,” it said.
Banks are required to report to the FIU by no later than 18 October 2021 on specific measures implemented.
However, the Confederation of Zimbabwe Industries bemoaned the arrest of business leaders. CZI President Kurai Matsheza noted that” bad policy blurs the lines and results in criminal activity co-mingling with legitimate business survival decisions in a forex mispriced system”
It reiterated that a true Dutch auction would perform the function of price discovery and pave the way for a more liberal exchange rate regime. The value of the local currency has weakened to 90 per US dollar on the official market. It trades significantly weaker, at around 170x to the US dollar, on the black market.
“The arrest of business leaders will only serve to destabilize the relationship between business and authorities as the two need to work together to re industrialize between business and authorities as the two need to work together to re industrialize the economy in pursuit of Vision 2030.
“Fear will drive business decision making as has happened with the 2007 arrests with resultant shortages, as companies could not find any other ways of funding their forex requirements legitimately,” he said.
He added that: “The arrests will also cause unnecessary panic in the market and erode consumer confidence in government policies.”
CZI urged the authorities to ensure that the Auction System is managed in the true spirit of the Dutch Auction System.
Meanwhile, the All Share Index climbed 0.75% to close at 10,054.49pts. Trading activity remained subdued on weak investor sentiment due to exchange rate volatility. At the close of trade market capitalization stood at ZWL$1.2 trillion while turnover reached ZWL$131.17 million with 4.47 million shares traded in 452 trades.
The Top 10 Index advanced 1.10% to 6,098.88pts. Retail giant OK Zimbabwe was the top blue-chip performer gaining 10.16% to ZWL$25.1500 and Econet put on 5.25% to ZWL$70.0000. The stock now has a year to date gain of 636.97%.
CBZ was 5.16% up to ZWL$99.9500. Delta added 4.44% to ZWL$130.0000.
Mining stock RioZim rose 10% to ZWL$33.0000.
The Medium Cap Index nearly flat at 0.05% to 20,949.44pts. ART led the top fallers with a 11.26% fall to close at ZWL$8.0000. Nampak shed 8.25% to ZWL$11.0000. GetBucks lost 6.80% to close at ZWL$7.9100. Brick maker Willdale was 4.83% lower to ZWL$3.9025.
The Small Cap Index retreated 0.39% to 316,821.47pts on Medtech which eased 6.25% to ZWL$0.2250 – Harare