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The Reserve Bank of Zimbabwe (RBZ) says it is investigating allegations of currency manipulation by some business entities as well as breaches of the Bank Use Promotion Act.
Central bank Governor Dr John Mangudya, in a statement said the breaches had become particularly pronounced and prevalent at some schools and pharmacies.
“The Reserve Bank of Zimbabwe would like to advise the public that the Financial Intelligence Unit (FIU) is currently investigating cases of breaches of the Bank Use Promotion Act and currency manipulations by some business entities,” he said.
Currency manipulation by businesses setting their Zimbabwe dollar prices to black-market exchange rates, with some shops pricing their goods and services using illegal rates ranging from US$1: $180 to US$1: $210.
Dr Mangudya said the FIU would deploy all tools at its disposal to deal with such malpractices including imposition of fines, freezing of bank accounts and blacklisting from enjoyment of financial services.
Additionally, members of the public have been urged to report offending businesses and service providers to the FIU.
In many instances, there are varying rates for using local currency notes, mobile money or swiping using bank cards. Such a three tier pricing system is done in violation of the banking and finance laws of the country.
RBZ’s FIU once froze Sakunda Holdings, Spartan Security and Croco Motors accounts on suspicion that they were after the sky-rocketing parallel market rates last year.
The RBZ said the bank accounts held idle funds that were being used to speculate on currency.
More than 40 companies were found guilty of abusing the foreign currency auction system and were given civil penalties and barred from the auctions until they pay.
Towards the end of May, last year the Government announced Statutory Instrument 127 of 2021 Presidential Powers (Temporary Measures), which states that firms that abuse the foreign currency obtained at the foreign currency auction trading system could be heavily penalised by having civil penalties levied.
The civil penalties can be imposed after a Reserve Bank investigation, and because they are civil penalties the standard of proof is on the balance of probabilities, rather than the higher level proof beyond reasonable doubt required in criminal proceedings.
The companies that have been fined so far, were penalised in accordance with SI 127.
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