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Order suspending trading on the Zimbabwe Stock Exchange comes into force

A man poses with the new Zimbabwe two dollar bills as customers line up at a bank in Harare. Photo courtesy: Reuters
FILE PHOTO: A currency trader trades on the streets of Harare, Zimbabwe. (Photo browser / AP search)

Zimbabwe Stock Exchange trading was suspended on Monday following an order from the government last Friday that also halted transfers to mobile money platforms that are crucial to the country’s retail business.

According to the government, the order aims to protect the country’s currency, the Zimbabwean dollar, which has been in free fall in recent months.

“While we await instructions from our regulators on future operational arrangements, we are informing stakeholders that trading has been suspended until further notice,” said Zimbabwe Stock Exchange (ZSE) managing director Justin Bgoni, in response to the order.

The country’s permanent secretary at the Ministry of Information, Nick Mangwana, criticized the mobile money transfer platforms for causing the gap between the market exchange rate for the Zimbabwean dollar and the official exchange rate.

Mangwana said the government had “flawless” information that the mobile phone systems were plotting with the help of the Zimbabwe Stock Exchange, knowingly or accidentally, in illegal activities that paralyzed the economy.

Mangwana then singled out a service provider as the “central pivot of the galloping black market exchange rate”. The actions of this service provider have caused persistent increases in the prices of goods and services that are disrupting the economy and causing untold hardship for the people of Zimbabwe, he said.

In a reply, the Zimbabwe central bank said that mobile money transfers had not been completely stopped, but limited to around $ 87 a day.

President Emmerson Mnangagwa blamed Zimbabwe’s currency problems on political critics and greedy private sector players.

He said the currency was under attack by companies that constantly raised prices and it was part of a larger political plan against his government.

Zimbabwe’s local currency plunged into the black market, fueling price increases and driving inflation to 765%.

Zimbabwe’s economy, facing one of its worst crises in decades, is struggling with rampant inflation and soaring prices of raw materials and fuels amid a food shortage. In addition, the country’s public sector has faced a number of strikes, particularly from doctors due to low wages and poor working conditions.