The Old Mutual Implied Rate, which was said to be one of the four or more United States to Zimbabwe dollar parallel market rates, today dropped by three points despite the ban on trading on the Zimbabwe Stock Exchange.
The ZSE today suspended trading in compliance with a directive from the government on Friday saying it now awaits guidance from its regulators on the operational modalities going forward.
The stock exchange is regulated by the Securities and Exchange Commission of Zimbabwe and the Ministry of Finance.
Information Secretary, Nick Mangwana on Friday said that trading on the ZSE was being suspended because the stock exchange was fuelling the black market.
Despite introducing a foreign exchange auction market to determine the exchange rate, the black market rate continued to soar to double the new average rate of 57.35 to the US dollar.
“Government is in possession of impeccable intelligence which constitutes a prima facie case whereby the phone-based mobile money systems of Zimbabwe are conspiring, with the help of the Zimbabwe Stock Exchange, either deliberately or inadvertently, in illicit activities that are sabotaging the economy,” Mangwana said.
“The impact is exacerbated by the existence of fake counters on the Zimbabwe Stock Exchange, which is epitomized by the so-called Old Mutual Implied Exchange Rate (OMIR). This, in turn, results in four or more US: ZWL parallel market exchange rates operating in the market.”
The OMIR is the difference between the share price of Old Mutual in Harare and London. It has been used as an exchange rate from way back before the 2008 collapse.
The OMIR which peaked at 141.59:1 on 2 June had risen to 118.85 by Friday but dropped to 122.22 today.