Identifier
Created
Classification
Origin
04HARARE1324
2004-08-04 06:06:00
UNCLASSIFIED
Embassy Harare
Cable title:
Parallel Market Over Z$10,000:US$
how-toThis record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS HARARE 001324
SIPDIS
STATE FOR AF/S, AF/EX
USDOC FOR AMANDA HILLIGAS
TREASURY FOR OREN WYCHE-SHAW
PASS USTR FLORIZELLE LISER
STATE PASS USAID FOR MARJORIE COPSON
E. O. 12958: N/A
TAGS: ECON EAID EAGR EINV PGOV ZI
SUBJECT: Parallel Market Over Z$10,000:US$
Ref: Harare 1319
A brief update on yesterday's report (ref): Bids topped
$53 million for the $9.5 million on offer at Monday
afternoon's Reserve Bank (RBZ) auction. The immense
unsatisfied demand is migrating quickly to the parallel
market. Yesterday, the RBZ shut down an exchange house
in a Harare neighborhood where the rate ranged from
ZS10,000-11,000:US$. A high-level RBZ official admitted
to us that speculative demand for US dollars at those
rates was strong, with the expectation that Z$15,000:US$
is just around the corner. The official (auction) rate
nudged up to Z$5400:US$. (Comment: This is a
significant crisis for the GOZ and RBZ. With an iron
fist, they are attempting to fight market dynamics and
enforce an arbitrary exchange rate. The overvalued rate
will no doubt be center stage at the Confederation of
Zimbabwe Industries' annual convention later this week.)
Sullivan
SIPDIS
STATE FOR AF/S, AF/EX
USDOC FOR AMANDA HILLIGAS
TREASURY FOR OREN WYCHE-SHAW
PASS USTR FLORIZELLE LISER
STATE PASS USAID FOR MARJORIE COPSON
E. O. 12958: N/A
TAGS: ECON EAID EAGR EINV PGOV ZI
SUBJECT: Parallel Market Over Z$10,000:US$
Ref: Harare 1319
A brief update on yesterday's report (ref): Bids topped
$53 million for the $9.5 million on offer at Monday
afternoon's Reserve Bank (RBZ) auction. The immense
unsatisfied demand is migrating quickly to the parallel
market. Yesterday, the RBZ shut down an exchange house
in a Harare neighborhood where the rate ranged from
ZS10,000-11,000:US$. A high-level RBZ official admitted
to us that speculative demand for US dollars at those
rates was strong, with the expectation that Z$15,000:US$
is just around the corner. The official (auction) rate
nudged up to Z$5400:US$. (Comment: This is a
significant crisis for the GOZ and RBZ. With an iron
fist, they are attempting to fight market dynamics and
enforce an arbitrary exchange rate. The overvalued rate
will no doubt be center stage at the Confederation of
Zimbabwe Industries' annual convention later this week.)
Sullivan