Reserve Bank of Zimbabwe (RBZ) freezes bank accounts of 12 goods suppliers over US$1: $7,000 Zim dollar exchange rates

The Financial Intelligence Unit (FIU) of the Reserve Bank of Zimbabwe (RBZ) has taken decisive action by freezing the bank accounts of 12 prominent suppliers of goods and services indefinitely. The freezing of these accounts is in response to allegations that these businesses have been refusing to transact in the local currency and engaging in forward pricing practices, which are believed to contribute to the volatility of the exchange rate.

Notably, four supermarkets belonging to a major retail chain in the capital have also been affected by this measure. Among the 12 companies, 10 are accused of engaging in forward pricing, a practice where prices are quoted based on projected future exchange rates. The remaining two companies are facing charges for exclusively pricing their goods in foreign currency.

Mr. Oliver Chiperesa, the director-general of the FIU, confirmed these developments and emphasized that market surveillance efforts are ongoing. He stated, “Yesterday (Friday), we uncovered 12 violators of our regulations and we have frozen their bank accounts. Two of them were businesses refusing to accept Zimbabwe dollars, while 11 were businesses using forward pricing.” He further explained that the law permits businesses to charge a maximum of 10 percent above the interbank exchange rate. However, some of the businesses were using exchange rates as high as US$1: $6,000 or even $7,000 to the US dollar, which is clearly excessive. As a result, their accounts have been frozen indefinitely.

Supermarkets using an exchange rate of US$1: $6,800, significantly surpassing the legally allowable margin, were among those penalized. It is worth noting that two weeks ago, the FIU had already frozen the bank accounts of four major distributors of basic commodities for similar practices.

The FIU warns that repeat offenders will face the revocation of their licenses. Mr. Chiperesa emphasized, “If we fine you and freeze your bank accounts and you continue committing the same offense, then it shows you are not able to operate within the confines of the laws of this country. We will then have to make such recommendations. However, for these 13, we are going to give them a chance to mend their ways. Should they commit a similar violation in the future, I think revocation of licenses is something which should be seriously considered by the relevant authorities.”

Dr. Mavis Sibanda, the Permanent Secretary in the Ministry of Industry and Commerce, highlighted the findings of a high-level committee established by the government. The committee identified “market malpractices” as the root cause of recent price hikes. To address this, the committee will conduct regular market surveillance. Dr. Sibanda explained, “The depreciation of the local currency against the United States dollar and the dollarization of the value chain, which has resulted in over 70 percent of transactions being conducted in the United States dollar, has had an inflationary impact on the prices of basic commodities.”

The Ministry of Industry and Commerce is conducting routine surveys on prices and availability of basic commodities in order to stay informed about market dynamics and develop evidence-based policies. The government intends to enforce the Consumer Protection Act to prevent, detect, and prosecute prohibited conduct and offenses. Dr. Sibanda further mentioned that punitive measures will be applied under relevant laws such as the Exchange Control Act, falling under the purview of the Reserve Bank of Zimbabwe.

President Mnangagwa also weighed in on the matter, warning that those deliberately engaging in such malpractices risk having their operating licenses withdrawn. The government is determined to tackle market malpractices and ensure fair and stable economic conditions for the benefit of the country’s citizens.