Oliver Kazunga, Senior Business Journalist
The Reserve Bank of Zimbabwe (RBZ) says it is preparing to flush out unscrupulous companies participating in the weekly foreign exchange trading scheme for their unruly behavior.
The monetary authority introduced the weekly foreign exchange auction trading system last year in June with the aim of improving forex access to productive sectors.
Speaking at a symposium hosted by the Zimbabwe Confederation of Industries (CZI) on Friday, RBZ Governor Dr John Mangudya said he noted financial irregularities perpetrated by some companies participating in the auction system.
“When we come to the auction, we again regretfully noticed that some people come to the auction setting up their storage companies so that they can participate more.
“We flush these out of the system and freeze these accounts so that if we freeze them for at least six months, if we hit you, then you will understand that you are not doing what you are doing,” he said. . noted.
Dr Mangudya said some of the companies had also blocked funds at the Reserve Bank, which are due to be transferred out of the country but still behaving badly.
“So there will come a time when we will also say that if you have funds stuck in the Reserve Bank, but you are unruly, that means you will suffer for your unruly and you won’t get them either. Otherwise, you cannot run the economy, you are against the progress of the economy, ”said the head of the RBZ.
In this context, Dr Mangudya said it was imperative that all stakeholders adhere to good corporate governance practices, as the monetary authority does not want to implement punitive measures.
He said the RBZ had been seized with the development of a statutory instrument that would empower the Financial Intelligence Unit to charge ad hoc fines.
“We are now saying that we have gone beyond disclosure and compliance orders, so we have asked the government to put in place a regulatory instrument for those who do not want to behave. . . if you can’t have self-discipline, someone has to foster discipline and it’s through these institutions (CRF and exchange control), ”Dr Mangudya said.
Meanwhile, Dr Mangudya said the RBZ is quite optimistic about the economy despite the Covid-19 pandemic and that the Central Bank wants to restore the essence of monetary policy in Zimbabwe by resorting to ‘back to basics’ “.
“We are very optimistic about the economy despite the challenges of Covid. We are very optimistic about the economy, we are very optimistic about what we have set for ourselves and we are getting back to basics and we want to restore the essence of monetary policy in Zimbabwe back to basics and c ‘is what this economy demands and we need your support mainly on market discipline,’ said Dr Mangudya.
He said that an economy without financial market discipline cannot prosper despite macroeconomic financial stability.
Under the Second Republic, Zimbabwe, under the leadership of President Mnangagwa, succeeded in achieving macroeconomic stability through the implementation of a two-year Transitional Stabilization Program (TSP) that ran from October 2018 to December 2020.
Building on the gains made by the PST, the government is now focusing on improving production to stimulate an export-oriented economy supported by the first National Development Strategy (NDS1), which would be replaced by NDS2 a another five-year economic plan that is expected to deliver the country to an upper middle-income economy by 2030. – @okazunga.