As the Zimbabwean currency continue to experience a blistering fall in value the big question is who controls the Zimbabwean foreign currency exchange rates.
Some economist and financial analysts say, “If a currency is free-floating, its exchange rate is allowed to vary against that of other currencies and is determined by the market forces of supply and demand.”
In 2020 RBZ said in a statement “It has come to the attention of the bank that there are some exchange rate manipulators that are exerting pressure on the forex market with the intention of destabilizing the stability that the country has been experiencing over the past months.”
Firstly, illegal Gold buyers who buy gold from illegal artisanal miners at a better rate than the RBZ and authorised institutions take the gold and inturn sell it to the parallel black market which inflates black market rates against RBZ rates.
Private and state enterprises also play a big role in determining the black market exchange rate because whenever they need to order merchandise in foreign currency, they go to the black market instead of RBZ because the whole process may take time and this renders the RBZ rate weak to that of the black market.
Illegal money sending organisations also contribute to determining the black market exchange rate because the agent charges a bit less to send the money from the agent to the contact in Zimbabwe than authorised money sending agencies who pay a sum to the government.
Lastly cross border traders also contribute because they escape fees that are due when they import goods into the country and then supply to private and state sectors who buy in foreign currency.