Trading on the Zimbabwe stock exchange resumed on the 3rd of August after nearly one month’s hiatus.
A month ago, trading on the stock exchange was stopped due to the collapse of speculative transactions that could lead to a collapse of the Zimbabwean dollar.
Trading is now resuming with restrictions on trading in the securities of some corporations. In particular, trading in securities of the investment banking group Old Mutual Limited is prohibited.
How the situation unfolded?
The Zimbabwe Stock Exchange should have opened at the end of June following a government investigation into its operating conditions and the exchange’s use of mobile money transaction platforms.
Justin Bgoni who is the CEO of the Zimbabwe Stock Exchange declared that they were awaiting instructions from the regulator and the trading was on hold until further notice.
The Zimbabwean government announced on June 26 a series of measures “to combat financial crime, waste and economic sabotage.” Transactions on the national stock market and related mobile payment systems were placed under special control. According to the supervisory authorities, operations on the stock exchange cause a fall in the exchange rate of the national currency against the US dollar.
In general, it should be said that trading is a very popular activity in Zimbabwe.
The hiatus in trading was a huge blow to citizens involved in this field and at some point they were forced to move to Forex trading approaching Zambian forex brokers list on the Internet which is gradually rising.
Earlier in June, the management of the exchange informed the government that in the current conditions it would be forced to suspend trading and the exchange did not open for operators on Monday.
The economic situation in Zimbabwe has deteriorated significantly during this June. Zimbabwe’s National Bureau of Statistics reported that inflation in the country reached 785.5% year-on-year in May. In the face of a shortage of currency, the Reserve Bank of Zimbabwe began selling it at auctions. The first one took place on June 23, transactions were made at the exchange rate of one US dollar – 57 Zimbabwean dollars, although the official rate is 1 US dollar – 25 Zimbabwean dollars. On the next day, June 24, authorities announced an immediate 150% increase in petrol and diesel prices. Over the past two weeks, prices for staple foods, including bread, have risen strongly. According to the New Zimbabwe website, market traders have stopped taking local currency and were demanding payment in hard currency.
COVID-19 and Zimbabwe
Besides legal issues, the coronavirus pandemic is also a problem for the country. Even though the country does not have that many cases as it is in South Africa – only 5,930 as of August 24 and 155 deceased. But still it disrupts the usual way of life greatly.
The curfew in Zimbabwe has been reduced from 12:00 to 10:00 by the decision of the African government, which has been active more than a month.
The night curfew, imposed as a response to the COVID-19 epidemic by Zimbabwe’s President Emmerson Mnangagwa, previously lasted from 6:00 pm to 6:00 am.
According to the new decree, the curfew will begin at 20:00. Employers are allowed to extend the working day until 16:30 – previously it was supposed to end at 15:00.
Once again we should note that since the beginning of the COVID-19 epidemic in Zimbabwe, a country with a population of more than 16 million people, there have been significantly low numbers of cases of the coronavirus infection and deaths from the disease.
However, it is difficult to say if this number of confirmed cases is due to government quarantine measures or if it is a consequence of the catastrophically low coverage of the population of Zimbabwe with coronavirus testing.