While many Zimbabweans have been forced to stop working over the lockdown period the team at the Reserve Bank of Zimbabwe have been hard at work. Yesterday the apex bank issued a statement to the public that suspended the operating licences of two Bureau De Change, Cash twenty-four and Crediconnect. According to the statement, licences have been suspended pending further investigation.
The statement is not clear on the circumstances that have brought about the suspension but makes mention of engaging in illicit foreign currency transactions. It doesn’t take a financial genius to understand that the two are likely to have been dealing in foreign currency at rates other than the prescribed interbank rate, currently frozen at 25 to the US dollar. As the matter is still under investigation, information is expected to be scarce. This would not exactly be news to Zimbabweans who have witnessed bureau de change engaging in transactions at the parallel market rate.
According to the Financial Gazette, the Reserve Bank Governor Dr John Mangudya has also done away with foreign currency liquidation requirements for businesses. Exporting businesses in many sectors were allowed to retain a percentage of their foreign currency in FCAs while the remainder was sold to the Reserve bank at the prevailing interbank rate. However, the remaining amount had to be sold on the interbank market at the prevailing rate within 30 days. The moves made by the Reserve bank of Zimbabwe thus far in the wake of the COVID-19 pandemic have a distinct pattern of being concerned with Government of Zimbabwe’s sources of foreign currency income.
In the case of the licence suspensions, it is not quite clear what evidence the Reserve Bank possesses or when the evidence was gathered. There is palpable scepticism about how the matter will be handled as in the past similar matters have been handled with a lack of transparency and they seem to just disappear over time. In other cases, information later comes to light that nullifies the allegations as a whole but leaves the public with more questions than answers.