Sunday, July 21, 2024
HomenewsRBZ threatens industry

RBZ threatens industry

John Mangudya


The Reserve Bank of Zimbabwe (RBZ) has threatened to name and shame companies it accuses of manipulating the exchange rate and violating exchange control rules.

The threats come as business leaders are questioning why the RBZ is “punishing the whole economy” instead of directly dealing with the malcontents that are accused of destabilising the country’s financial systems.

The central bank said the companies were fuelling the parallel market exchange rate and yesterday it threatened to name and shame the mischief-makers.

“In the wake of manipulation of the exchange rate by some borrowers of large amounts to the detriment of consumers, the central bank reserves the right to publish the names of significant borrowers across the banking sector in the public interest,” RBZ said.

The development also comes after there was a public spat between the businesses and the central bank over flouting of the forex auction system rules.

On the one hand, the RBZ has been defending the auction system and pushed for its continuation.

On the other hand, business has been pushing the RBZ to ditch the auction system saying it has failed to bring desired results.

The RBZ  has been accusing businesses of abusing funds accessed from the auction system and manipulating the exchange rates.

The Confederation of Zimbabwe Industries president Kurai Matsheza told Business Times the central bank  should punish the offenders rather than  having a ‘blanket punishment’.

“The central bank can go ahead and publish the list of the forex manipulators but what is critical is to ensure that they put sanctions or necessary punitive measures to the perpetrators rather than to put blanket measures that affect the whole industry.

Action is what is needed in dealing with these cases, they can publish and not put necessary restrictive measures, threatening is not enough, punishment should be implemented on a case by case basis,”Matsheza said.

He added: “Even if we don’t see the list and action is taken against it’s still fine.”

Matsheza said the hazards of a blanket policy measures were that the real culprits may not be affected with the non-offenders heavily affected.

“The RBZ has enough arsenal to deal with offenders and it should just exercise its powers without making it public,” he said.

At the unveiling of the 2021 manufacturing sector survey report in the capital, Dairibord Holdings Limited CEO,  Anthony Mandiwanza told delegates that the authorities should apply punitive measures on a case by case basis.

“The authorities are quite aware of the manipulators of the exchange rate and abusers of the forex accessed through the auction system and they should go for those perpetrators rather than punishing the whole economy,” Mandiwanza said while moderating at the industry report launch yesterday.

At the end of April, RBZ suspended three dealers which include Metbank Limited, Simbisa Brands  and Rolink Finance (Private) Limited for contravening exchange control rules.

The cessation of the service means that customers shall no longer be able to deposit funds into the InnBucks account or transfer the funds to third parties.

However, customers were allowed to redeem their balances for cash or goods at Simbisa Brands (Private) Ltd outlets within a period of 30 days from date of the Press Statement.

RBZ also suspended Rolink Finance (Private) Limited from operating as a bureau de change.

The suspension is a result of breaches of the Exchange Control (Authorised Dealers with Limited Authority) Order, Statutory Instrument 104 of 2015 and Exchange Control Circular Number 2 of 2021 issued to Authorised Dealers with Limited Authority (ADLAs).

For the said exchange control violations, a penalty of US$120,000 or its equivalence in Zimbabwe dollar has been levied against Rolink Finance (Private) Limited.

In January, RBZ also investigated schools and pharmacies which were abusing foreign currency they acquired from the forex auction and channeling it to the black market.

RBZ pursued well-knit networks of those schools and pharmacies which were buying the foreign currency at an official rate and selling on the parallel market then going back to the auction system to offload the local currency.

Mangudya said the central bank will “ensure that authorised dealers or banks and foreign exchange auction system participants comply with auction rules and regulations to curb abuse of the foreign exchange auction and safeguard the auction from being abused as a breeding ground for arbitrage opportunities.

The money authorities have been accused of not effectively dealing with the abusers of the foreign exchange auction system. The authorities have, however, vowed to leave no stone unturned in cleaning up the financial services sector of any malfeasance threatening to destabilise the foreign exchange auction system.

National Foods, Georgia Petroleum, Tettola Investments, Africa Steel, Westvillle Investments (T/A) Omni Africa) and Flicknik Enterprises  are among  the first companies that were punished  for manipulating the exchange rate.





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