Nevanji Munyaradzi Chiondegwa.
President Mnangagwa yesterday announced a raft of measures aimed at stabilising the economy in the face of rampant exchange rate manipulation and market indiscipline.
Banks, which have been implicated in the chaos which obtained in the market recently have had their wings clipped.
“In order to minimize the creation of broad money that is prone to abuse for purposes of manipulating exchange rate for financial gain, and to allow current investigations, lending by banks to both Government and private sector is hereby suspended with immediate effect until further notice,” read part of President ED Mnangagwa’s speech yesterday as he announced new measures to stabilise the runaway inflation caused by what analysts have termed currency manipulation.”
It has long been suspected by many analysts that short-term borrowing has been used as a means to finance illicit current trading on the streets. To curb this, the government has thus suspended banks from lending to clients until further notice.
On the Zimbabwe Stock Exchange, unscrupulous individuals were exchanging United States dollars then asking their brokers to liquidate their shares and transfer the money into accounts of their trading partners.
Shares had become a platform for illicit foreign currency deals.
“Government has noted regulatory weaknesses in the custodial system of the Zimbabwe Stock Exchange sub-systems which are fueling parallel market activities. The current system allows clients to sell shares and then transfer the proceeds to third parties for purposes of trading forex.
In addition, brokers can transfer funds from one client sub-account to another, which have become the basis for fueling parallel market activities,” said President Mnangagwa.
In a bid to plug these loopholes, inter account transfers between client sub account with a broker are now prohibited and third party funding of client sub-accounts is no longer permitted.
Other measures also announced include the a new 2% fee for foreign currency cash withdrawals above USD1000 up from the previous 5 cents. Also introduced is a 4% IMTT on domestic foreign currency transfers.
These measures which have been describes as solid and will in the short term restore sanity to the market.
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