(3 minutes read)
· Zimbabwean President Emerson Mnangagwa charged financial institutions of “stashing” foreign currency for speculative street
currency dealings, thereby causing high inflation through exchange rate distortions
· The President told banks and financial institutions start paying interest on Foreign Currency Accounts held by corporates and
individuals
· He charged that banks were selling foreign currency at higher rates, creating artificial inflation in the country
Zimbabwean President Emerson Mnangagwa charged financial institutions of “stashing” foreign currency for speculative street currency dealings, thereby causing high inflation through exchange rate distortions.
Zimbabwe is hugely short of foreign currency. The country is unable to pay for key imports such as fuel and medicines. Earlier, the
government has blamed mobile money agents for indulging in street currency trade. That has created the parallel market rate for the
Zimbabwe dollar at 1:60 as against the official interbank rate of 1:25.
Mnangagwa now turned towards banks, accusing them of involvement in illegal street currency dealings. The President told banks and
financial institutions to start paying interest on Foreign Currency Accounts held by corporates and individuals. He charged that banks
were selling foreign currency at higher rates, creating artificial inflation in the country. Earlier this week, Finance Minister Mthuli
Ncube called for robust regulation to control the parallel foreign currency market.
Zimbabwe has already charged mobile money platform, EcoCash for running a Ponzi scheme that is grossly impacting the exchange rate. Analysts feel that in the coming days, there will be strict scrutiny on banks and mobile transfer companies to stem the outflow of foreign
exchange and to keep the price line under check.
