The lockdown period has been a pretty successful one for the Reserve Bank of Zimbabwe in their fight against bureau de changes which have been involved in inappropriate currency dealings. This comes after the apex bank found two more bureaus which were involved in illicit foreign currency transactions. The bank also found three unlicensed bureaus.
After last week finding Cash Twenty Four and Credit connect in violation the two were handed over to the Financial Intelligence Unit. The two were accused of not recording some transactions and therefore violated their licences and anti-money laundering regulations. Cash Twenty Four has since admitted guilt and is fined ZWL$2500000 while the Credit Connect case is ongoing.
The two new cases, Shons Financial Services and Superdeal Enterprises trading as Kwik Finance also stand accused of not recording and reporting on foreign currency transactions. The two have had their licences suspended and investigations will be carried as they have been handed over the Financial Intelligence Unit.
Meanwhile, in three rather bizarre cases Stallion Financial Services, Forbes Financial Services and Juso global were trading in foreign currency without licences. Details as to how long they had been doing this and the value of transactions were not published however one can imagine that these cases are not the only ones.
The Reserve Bank of Zimbabwe have set for themself a daunting task of trying to regulate a foreign currency they have little to no control over. Upon the initial announcement of the lockdown the bank chose to freeze the interbank rate at 25 at that point in time the parallel market rate was just under 45. In spite of an initial dip, the parallel market rate has matched on to 49 at the highest though the lockdown and movement restrictions have created differential rates based on location.
The mere fact that someone can set up a bureau de change without being licenced should be a signal that the situation is beyond their control. Unfortunately, the apex bank has consistently shown a desire to deal with symptoms instead of the root causes, inefficiencies of their creation in the allocation of foreign currency.