Zimbabwe’s central bank, the Reserve Bank of Zimbabwe (RBZ), has limited internal bank transfers to two per day, a move that seeks to curb the free fall of the Zimbabwe dollar.
In a letter directed to banks, RBZ Financial Intelligence Unit (FIU) acting director-general Oliver Chiperesa attributes the changes to an increase in the abuse of the internal bank transfer facility by illegal foreign currency dealers.
“We have noticed that entities are using their bank accounts to buy foreign currency, using a network of runners, some of whom have been advertising their services on social media. These illegal transactions manifest in the form of multiple daily payments from one account to beneficiaries who hold accounts in the same bank,” CGTN quotes director-general.
For the past few months, the Zimbabwe dollar has been falling tremendously against the U.S. dollar, with the central bank accusing illegal forex dealers of encouraging high inflation by distorting exchange rates.
Earlier this month, RBZ directed all banks to freeze over one hundred bank accounts linked to mobile money agents that are suspected of involvement in illicit foreign currency trading. The central bank blames mobile money agents for driving the illegal foreign currency trade, which has driven up the parallel market rate for the Zimbabwe dollar to 1:70 compared to the official inter-bank rate of 1:25.
Official figures from the Zimbabwe National Statistics Agency show that year-on-year inflation in March 2020 stood at 676%.
In October 2019, the Reserve Bank of Zimbabwe put reins on mobile money and tightened rules on foreign exchange in an attempt to control its failing monetary system. Zimbabwe also banned quoting of prices in any currency besides its dollar.
The bank stopped mobile money operators from paying out cash because operators charged a premium of up to 60%, therefore creating an implied exchange rate. Forex dealers in the country were also directed to exchange the Zimbabwe Dollar between 3-5% from the official rate, down from the earlier 7%.