Zimbabwe’s Reserve Bank clamps down on parallel forex market
The Zimbabwe Reserve Bank, through its Financial Intelligence Unit (FIU), is clamping down on alternative market foreign currency dealers and has banned these services from advertising on social media platforms.
While the Unit has threatened action across all platforms, the sale of forex is particularly high on WhatsApp.
All legal foreign currency dealers in Zimbabwe have to be registered and sell forex at a pegged rate.
The FIU issued a statement recently which reads in part: “The FIU is aware of WhatsApp groups that have mushroomed in the country for the specific purpose of promoting and facilitating illegal foreign currency trade.”
According to the FIU, the Bank, in collaboration with the police, banks and mobile money/phone service providers and relevant regulatory agencies, “has embarked on an exercise to identify and take action against individuals who create, advertise on or participate actively or passively in WhatsApp groups or other platforms for illegal foreign currency trading.”
The Unit threatened to bar mobile phone numbers belonging to dealers and freeze their financial accounts, as well as money held in mobile phone wallets.
It added that it will request telecommunications operators block numbers linked to the promotion of what the financial regulator describes as illegal foreign currency trading.
Independent ICT expert Tsevetana Dhliwayo said the government cannot control these platforms and what users share.
Dhiwayo said, “WhatsApp has end-to-end encryption of chats, so they have no access to what people are sharing. Some are using numbers from other countries while they are in Zimbabwe.”
He added: “The feasibility of such a stunt, assuming that it was going to be a success, it's driving the masses to a cul-de-sac in the sense that, if you stop something, be sure to provide adequate quantities and information of what is required. The Bureau de Change in Zimbabwe will never offer adequate currency exchanging facilities so they can't control what they can't offer. They have better issues to deal with, not issues of tissues.”
Economist and founder of the Bullion Group, Persistence Gwanyanya said the action by the central bank should be lauded as “it will keep checks and balances on the market indiscipline”.
Gwanyanya recommended that foreign currency be auctioned through a central currency exchange.