Last week Friday the RBZ decided to flex its muscles against mobile money operators whom the bank accuses of fuelling the foreign currency black market. This time though the blow was more surgical unlike last year’s clumsy blanket ban on cash-ins and cash-outs.
This time around the Bank’s Financial Intelligence Unit sussed out a list of suspected mobile money wallets from both Ecocash and OneMoney. The list of over a 100 wallets was then sent out to banks with the directive that they freeze the wallets and their linked bank accounts immediately.
The result was a mild firming of the local dollar which hasn’t had a break in a while. In the low volume market rates have this week, most certainly as a result of the RBZ’s actions, gone down to around 1 USD:45 ZWL from as high as 1 USD:50 ZWL. In fact due to muted trading as evidenced by low traffic in a lot of Forex-related WhatsApp groups some people have been offering rates as low as 1 USD: 42 ZWL.
This too shall not last
We have seen this dance countless times before including during the cited blanket ban on cash-ins and cash-outs. In fact, curiously some of the measures put in place after the ban such as limiting cash-ins at $500 ZWL remain in place and yet the rates have continued to climb.
As with the directives and measures before it, this does not address the fundamentals facing businesses when it comes to foreign currency. Despite promises to the contrary the RBZ and the government have conspired to keep the rates fixed at the arbitrary 1USD: 25 ZWL point instead of freeing up the market.
The result has been that most companies even the large formal ones have been left on their own when it comes to raising much needed foreign currency to finance their operations as none is coming from the formal legal circles. For these companies, there are only two options sink and die or swim in the murky world of illegal foreign currency trade. Suffice to say most have chosen to swim.
What will happen to the culprits?
Illicit foreign currency deals are very difficult to prove especially given the fact that one side of the transaction involves cash. In fact with a little bit of creative accounting, something most Zimbabwean entities are familiar with, the RBZ’s Financial Intelligence Unit will be put to their defence quite easily.
It’s not clear what punishment the culprits will face but given the circumstances and past experience, most will probably walk unscathed. Past account freezes have eventually been lifted, again because it is notoriously difficult to prove the charges being levelled here.
About the Author
Garikai Dzoma is the founder and editor of zimpricecheck.com