The Reserve Bank of Zimbabwe has warned business entities who are manipulating the value of the local currency –the Zimbabwe dollar (ZWL) by using a parallel exchange rate when transacting.
The Bank has struggled to give stability to the local currency since introducing it in 2019 despite issuing a series of Statutory Instruments to buttress it.
To compound problems for the ZWL is the lack of public confidence in it, particularly in a market where it is circulating concurrently with a reliable and stable America dollar (USD).
In a statement released this afternoon, RBZ said it has noted currency distortions and its Financial Intelligence Unit (FIU) is currently investigating currency manipulations, notably in schools and pharmacies.
“The Reserve Bank of Zimbabwe would like to advise the public that the Financial Intelligence Unit (FIU) is currently investigating cases of breaches of the Bank Use Promotion Act and currency manipulations by some business entities. The breaches have become particularly pronounced and prevalent at some schools and pharmacies,” said the RBZ.
“The FIU will deploy all tools at its disposal to deal with such malpractices including imposition of fines, freezing of bank accounts and blacklisting from enjoyment of financial services.”
Officially, the ZWL currently trades at ZWL$ 108.6660 against the USD on the auction system which last traded on the 14 of December last year against the parallel market rate of ZWL$ 210/USD.
The growing disparity between the two rates, the official and the parallel market, has created pricing challenges for business players.
To preserve value and operate in a viable manner, businesses are using the parallel market rates as a result.
According to market watchers, the official rate remains detached to reality on the market as authorities as it is subjected to manipulation by authorities.
Early this week, Confederation of Zimbabwe Industries (CZI) president Kurai Matsheza told 263Chat Business that the currency distortions were creating a challenge for business.
“The currency question (pricing and availability) will remain an albatross around industry performance. As industry, we have given recommendations to the authorities on what we believe could be some solution around the issue,” said Mutsheza.
He also said the delay in conduction the first foreign currency auction for the year from the initially scheduled 11th of January to the 18th will pose problems for companies.
“Businesses need to get foreign currency as and when the need arises. The opening of the auction on 18 January means the first month of 2022 is wasted, gone unless an entity had adequate buffer. The industry needs for a month have not been met and in addition, in a lot of cases there are backlogs. Hence this deferment is certainly not a welcome development for industry,” said Mutsheza.