Nkosilathi Sibanda, Business Correspondent
THE Reserve Bank of Zimbabwe has cornered illegal money changers and will continue to come up with measures to deal with the rampant illicit trade.
Over the past weeks, the Central Bank has come up with a number of measures to deal with illegal money dealers who have been fuelling the parallel market rates of foreign currency. The bank’s Financial Intelligence Unit (FIU) recently directed all banks to review downwards Zipit transaction limits to $20 000 a day from $100 000 following abuse of the facility by illegal foreign currency dealers. This was a few weeks after the Apex bank also directed mobile money service providers to freeze accounts belonging to agents with transaction activity above $100 000.
On Thursday the Central Bank’s Financial Intelligence Unit (FIU) issued a statement outlining that bank account holders would be allowed to make not more than two interbank transactions per day.
RBZ Governor Dr John Mangudya told Sunday Business on Friday that the bank could not sit and watch dealers dragging the country into chaos. He said for the economy to move forward, illegal money changers must be stopped in their tracks and citizens have to exercise discipline.
Dr Mangudya was clear that while the RBZ was doing all it can to address the runaway black market, it was solely the responsibility of every citizen to shun illegal money changers.
“What is lacking is self-discipline. We need to make sure we produce for the economy so that we become self-sufficient. The behaviour of selling money is not conducive for economic growth. There is no economy that has grown by selling money to get money. Let us have national interest. We have to be patriotic and develop national ethos that is good for the economy,” he said.
Dr Mangudya also warned that those who post pictures of bank notes on social media risk being arrested. He said such foolhardy and unpatriotic tendencies are retrogressive and unlawful.
“It is illegal to show off cash on social media. Members of the public risk being arrested,” he warned.
The Central Bank boss is on record as saying the only way the country can address the anomaly in the exchange rate is for citizens to desist from speculative tendencies.
“These problems are caused by behavioural issues. Zimbabweans have become very speculative in nature. As a move to block the black market, the RBZ has instituted new measures that are to put a blow on the black market.”
In the past two weeks, the monetary trading regime in the country has somewhat spiralled to record highs. Illegal money changers have fixed foreign exchange trade against the local currency at runaway rates each day. As of Friday, black market rates for the local currency were pegged as high as 1:60 to the United States dollar, while the official bank rate stands at 1: 25.
Internal bank transfers are popular within the black market racketeers as money changers resort to draw off huge sums of money. Scheming money traders who have bank accounts persuade members of the public to accept trading at inflated rates in the parallel exchange rate. Bank accounts which are now conduits of illegal forex trade will be strictly monitored, the RBZ has said.
“Each bank customer shall make no more than two transactions per day by way of internal transfer, regardless of the values involved,” said RBZ.
The RBZ stated that while there would be no restrictions Real Time Gross Settlements (RTGS) transfers, banks must remain on guard to monitor accounts. On 26 May, the Central Bank implemented tight measures that put paid illegal dealing by mobile money traders on the EcoCash platform.
“We have noted a trend where entities are using their bank accounts to buy foreign currency using a network of runners, some of whom have been advertising their services on social media. These illicit transactions manifest in the form of multiple payments from one account to beneficiaries who hold accounts in the same bank.”
The selling of cash done by illegal money changers is known to many as “burning” and is not a new phenomenon on the economy. The “burning money” practice went viral in the hyper inflationary period between 2007 and 2008. It involves the trading of hard cash on the black market for a premium.