INTERNATIONAL money transfer agency, Western Union, on Monday ran out of foreign currency for customers after Zimbabweans living abroad sent in US$1,7 million to their counterparts.
There was drama in Harare’s central business district on Nelson Mandela Avenue as disgruntled customers began losing tempers after being told by Western Union officials that foreign currency was being rationed because it could not go round the hundreds of them queuing outside.
The branch had to be temporarily closed and security agents called in.
Last week, after meeting with South African Reserve Bank governor Tito Mboweni in Botswana, Reserve Bank of Zimbabwe governor Gideon Gono sent a statement telling the nation that they could now sell their foreign currency to local banks and no questions would be asked as to the source of the cash. Gono said the rate used would either be $5 200 or the prevailing auction rate, whichever was higher.
The auction rate on Monday stood at $5 333,76 for the United States dollar and $9 459,68 for the British pound.
“The money transfer agencies still need to solve a few procurement issues in order to deal with transfers from the diaspora,” economic consultant Eric Bloch said. “They had not requested a huge amount of forex to give customers and were overwhelmed by the response.”
Bloch chairs the RBZ committee set up to tap foreign currency from Zimbabweans in the diaspora. He said money transfer agencies however needed to get their act together for the process to be smooth.
“After I made my announcement that locals will not be asked where they got the money from, it started rolling in,” Gono told businessdigest. “In the two days after my announcement from Botswana we have received US$1,7 million, which is not small change. Just imagine what will happen in a month.”
The money was from the UK, South Africa and the US.
“Individuals now prefer to hand in their money to money transfer agencies and commercial banks than sell it on the streets,” Bloch said. “If they get caught then they forfeit the money to the state and are arrested.”
Parallel market rates at the moment are about $5 500 to the US greenback as opposed to $5 300 officially, giving a difference of between $100 and $200.
Analysts said the huge amount of money could have been intended for school fees for relatives failing to meet the country’s escalating costs.