Financial Intelligence Unit Plots Crackdown On Money Changers

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The Financial Intelligence Unit (FIU) is plotting a crackdown against individuals and companies allegedly involved in exchange rate manipulation.

When the Zimbabwe Gold (ZiG) currency debuted two weeks ago, the rate was ZiG13.56 per US$1, but illegal money changers are now trading at ZiG20: US$1.

FIU director Oliver Chiperesa told Business Times this week that the unit has identified wholesalers and manufacturers involved in exchange rate manipulation. He said:

For our part as FIU, we have identified traders, especially wholesalers and manufacturers who are either not accepting ZiG or are putting an unjustified premium on the rate, and we are taking stern action on those.

We have given them a warning to comply by the end of the day today (Wednesday) after which we will be freezing their accounts and fining them.

Some are claiming they are still configuring their systems so are not yet accepting ZiG. We have told them that if it’s taking them that long to configure, they should stop trading until they are in a position to accept both currencies.

Chiperesa said FIU is monitoring bank account activities to look for any infractions. He said:

If we catch them, we will permanently freeze the illegal forex dealers’ accounts. We acknowledge that the parallel market is still there but generally, it is within the acceptable range of probably 10% of the official rate and that’s normal.

Whilst we don’t tolerate such issues, it’s still normal in an economy. But when we see some serious distortions we step in to investigate and take steps.

We are already in the streets before the money changers are too many in the streets, we don’t want to wait for the exchange rate to go beserk.

Apart from clearing them from the street, we are monitoring bank transactions so that we may identify red flags with some of the transactions occurring.

If we see transactions undertaken repeatedly in the same shop or outlet, we will permanently freeze those bank accounts.

We democratically allow people to open accounts with as many banks as one can but those with more than three accounts will certainly come under scrutiny.

When you see someone with four accounts there is something amiss, we will identify those as well. The dealers try to transact on many platforms to avoid being noticed but we are certainly now on them again on too many accounts.

Zimbabwe Republic Police (ZRP) spokesman Assistant Commissioner Paul Nyathi last week said they were waiting for the go-ahead to launch the blitz on illegal money changers. He said:

We are working together with the Reserve Bank of Zimbabwe to end this practice and the law will take its course without fear or favour.

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