Last week the RBZ named 30 people who stand accused of ” abusing telecommunications and social media channels to influence the parallel market rate”. To put that in English they are accused of using services like WhatsApp to solicit customers for parallel market foreign currency deals. The 30 were slapped with banking and telecommunications bans and now the RBZ has added 47 more names to the list.

Though the list now contains 77 names the objective of the whole name and shame exercise may prove a little more elusive than the perpetrators. In the 1 week since the publishing of the first 30 names, the rate at which you would buy a greenback on the parallel has risen from 170 to 175 according to sources. With 12 weeks left in the year an increase of 5 dollars per week in the rate going forward would have well above 200 by year-end. Not good reading at all.

Of course, it must be said that going after these individuals doesn’t solve the dual problems of shortages of and access to foreign currency. The RBZ gave bureau de changes the green light to sell foreign currency to individuals though limited to US$50 per week. While some attest to having purchased foreign currency through the initiative it does not seem like the idea has brought people to the table. It would be interesting to see data from the RBZ on the volumes the facility had handled since its introduction. The bigger problem is of course in corporate Zimbabwe which was given an auction system that had of late been delaying foreign currency allocations to auction participants even though they had paid for the bids upfront. Making successful bidders wait 6 weeks simply indicated something we had surmised from the beginning; the RBZ was auctioning cash it did not have.

The press release itself contains no further information and in fact, tells us that the 47 stand accused of doing the same thing as the first 30and will receive the same bans and sanctions. A look at the landscape will tell you that the problem is bigger than these 77 people. The auction-rate for Tuesday the 5th of October was 88.55 for one US Dollar. That now places that parallel market premium at 97.6% compared to what used to be a high of a 30% premium. The RBZ finds itself fighting fires on multiple fronts as many listed companies have expressed their reservations about the official exchange rate and how out of touch it is with reality.

This morning, the RBZ tweeted that it was investigating allegations of pegging of the rate at 1:200. This after social media witnessed receipts from a quick-service restaurant chain showing two receipts for the same item. One shows the item paid for was US$1 while the second receipt paid for in local currency shows the buyer paid ZWL$200. The management of the chain explained however that the disparity occurred because of a lack of US Dollar change, the item costing US$1.25 and therefore making the effective rate 160. This is almost double the auction-rate so I’m not sure how that makes things better. Perhaps the RBZ is accepting 160 but not 175.

TThis are not looking good in the exchange rate space and the RBZ has thus far busied itself with 77 individuals and I am sure more will follow. After they have satisfied their penchant for naming and shaming the real work of stabilising the exchange, as they have shown they can do before, awaits.