Security Forces Want RBZ Overhaul to Halt Currency Slide; Push for CIO Control of Apex Bank Unit

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By Bloomberg News

HARARE: Zimbabwe’s law-enforcement agencies have called for the central bank’s investigative arm to fall under the control of the president’s office as currency manipulation is becoming a “national security matter,” the Zimbabwe Independent reported Friday.

The Joint Operations Command wants the Financial Intelligence Unit to fall under the secret service in the president’s office because the “forex black market is undermining the economy,” the Harare-based newspaper said, citing people it didn’t identify.

Since last year the central bank and state officials have repeatedly urged businesses to stop manipulating the exchange rate by exploiting the gap between the parallel-market and official currency prices for profiteering.

The volatility in the rate has seen the Zimbabwean dollar plunge by more than a quarter in the last five months, fueling inflation that quickened to more than 66% in February. The local unit officially trades at 124 per dollar, and more than twice that on the parallel market.

This is the second time in less than two years that Zimbabwe’s security forces have taken a stance on the currency, a sign that military officials are growing impatient with the central bank’s efforts to curb the slide in the local unit.

In June 2020, they sidelined economic chiefs, ordered the shutdown of the Zimbabwe Stock Exchange for five months and the halt of mobile-money transactions, without notifying the central bank, which regulates the mobile-money industry through which almost all of Zimbabwe’s commerce takes place.

Due to the pressure from the JOC, the FIU is expected to increase the number of fines it issues for currency manipulation, freezing of corporate bank accounts and the arrest of high-profile individuals, the newspaper said.

John Mangudya, the central bank governor, didn’t immediately respond to calls on his mobile phone seeking comment.