Reserve Bank of Zimbabwe warns currency manipulators

The Reserve Bank of Zimbabwe said today that it has directed its Financial Intelligence Unit to track down and freeze accounts held by foreign currency dealers who are exerting pressure on, and destabilising the exchange rate.

Black market rates have gone up to around $25 for one US dollar up from around $22, while the interbank mid-rate was at 17.24.

In a statement, the central bank warned the dealers against destabilising the exchange rate which had held steady over the past four months.

“It has come to the attention of the bank that there are some exchange rate manipulators that are exerting pressure on the forex market with the intention of destabilising the stability that the country has been experiencing over the past four months. Such malpractice is not warranted as money supply has remained under control for the past five months,” it said.

“The matter has been escalated to the financial intelligence unit that is proceeding to investigate and freeze the accounts of those upsetting the market.”

Last year, the RBZ froze several accounts of companies suspected to have been involved in exchange rate manipulation after rates spiked.

The RBZ statement comes just days after its Monetary Policy Committee (MPC) had commended the measures taken since last year to stabilise the exchange rate.

“The stability of the exchange rate witnessed over the past four months, starting from September 2019, was a result of measures taken in 2019 to manage money supply. This stability has significantly assisted in anchoring inflation expectations emanating from bench-marking of domestic prices to exchange rate movements,” the Committee said.

“The observed exchange rate stability was on account of adherence to monetary targeting, coupled with improved confidence in the use of the local currency and enhanced foreign currency inflows.”- New Ziana

(154 VIEWS)