RBZ widens net to consolidate ZIG

Richard Muponde and Sikhulekelani Moyo, Zimpapers Politics Hub
THE Reserve Bank of Zimbabwe’s (RBZ) Financial Intelligence Unit (FIU) is expanding its operations outside Harare in a decisive move to bolster the stability of the local currency (ZWG) and ensure nationwide compliance with currency exchange regulations.

The interventions will be backed by the issuance of high-quality and durable banknotes to be distributed to remote areas where electronic money platforms are not available.

Due to network limitations, most rural areas across the country do not use the ZWG, which is mostly circulating on electronic platforms. Small businesses that do not have point of sale (POS) machines, including those in cities, also rely on hard cash and sometimes deliberately close out more customers with ZWG.

RBZ Governor, Dr John Mushayavanhu, has stated that these challenges are being addressed in line with the Monetary Policy Statement issued early last month, which emphasised the need for widespread public awareness on the use of the local currency.

“This will be complemented by the issuance of higher-quality and durable ZWG banknotes, which will be strategically distributed to the most remote areas of the country where there are scarce brick-and-mortar financial services,” said Dr Mushayavanhu.

“In addition, the Reserve Bank, along with the rest of the world, will be celebrating Global Money Week from Monday, March 17 to March 21 2025.

“As part of the celebrations, the Reserve Bank will carry out financial literacy programmes, which will also target rural areas in providing information on the ZWG currency.”

Despite the Government calling for businesses to accept all recognised currencies, some continue to refuse ZWG, hiding behind network issues and sometimes pretending they do not have POS machines.

Dr Mushayavanhu said RBZ remains committed to ensuring that all Zimbabweans, particularly those in rural, marginalised, and outlying areas, have access to financial services as outlined in the National Financial Inclusion Strategy.

“As part of widening access to electronic payments, the Reserve Bank announced the roll-out of the POS machines programme, which is designed to reach all parts of the country under the mantra of ‘leaving no one and no place behind’,” he said.

“In this regard, the Reserve Bank will continue to undertake its financial literacy and consumer protection campaigns throughout the country in 2025 to support the uptake of financial services.”

A massive recruitment drive for more FIU inspectors has already been launched, and plans to establish offices in Bulawayo by May are at an advanced stage, while other provinces will follow, targeting areas with lower compliance levels. In previous years, Zimbabwe has experienced currency volatility caused by economic saboteurs through currency manipulation.

However, over the past five months, the ZWG has remained stable, with parallel market rates now almost converging with the official rates.

This stability came after the FIU launched blitzes targeting businesses, banks, and the informal sector to restore stability to the economy.

FIU Director-General, Mr Oliver Chiperesa, emphasised the need for the FIU’s expanded presence to consolidate the current economic stability and tackle pockets of resistance to compliance, particularly in areas outside the capital city.

“The FIU currently has offices only in Harare, and this year we are starting to move to other centres, beginning with Bulawayo. At the moment, we are recruiting inspectors to strengthen the current numbers,” he said.

Mr Chiperesa attributed the currency stability of the ZWG to heightened compliance among businesses, bolstered by efforts from the FIU, the security sector, and the Government to crack down on currency manipulators and economic saboteurs.

The FIU Director-General acknowledged that compliance levels remain inconsistent in areas where the FIU does not have a permanent presence.

“We have been receiving reports from other centres that businesses there have lower compliance levels. We have been sending some teams on an ad hoc basis to those centres, and we found that, indeed, in areas where the FIU does not have a presence, compliance levels among traders tend to be lower,” he said.

Mr Chiperesa said that to address this gap, the FIU’s expansion will ensure that traders in all provinces adhere to currency regulations.

He said the establishment of permanent offices in Bulawayo is a first step, with plans to review and expand to other towns and cities in the future.

“We want to make sure we have a presence in all major centres of the country. Starting with Bulawayo, we will review where else we need to deploy permanent FIU offices,” he said.

Mr Chiperesa reiterated the FIU’s commitment to enforcing regulations and ensuring that the stability being enjoyed remains constant for economic development.

“What we want to make sure of is that we consolidate that stability and ensure that businesses in all provinces are complying with the requirements,” Mr Chiperesa said.

Meanwhile, Dr Mushayavanhu has said the RBZ has instituted measures to allow for greater flexibility on the exchange rate and for further deepening of the foreign exchange market under the willing-buyer willing-seller (WBWS) arrangement, where the ZWG/USD exchange rate is determined under a floating exchange rate system by authorised dealers.

“Businesses, including those in tourism, can include a margin for additional charges related to transaction costs in line with normal business practices in converting the local currency to foreign currency with their bankers,” said Dr Mushayavanhu.

“Speculative attacks on the currency will always remain a risk. This risk is acknowledged by the practices of central banks across the globe and their readiness to intervene in the foreign exchange market to protect the value of their currency.

“In the same vein, the RBZ will strategically intervene in the foreign exchange market to smooth out any intermittent exchange rate volatility.

“Other speculative practices, which may take place in the goods and services market, will be addressed through measures to protect consumers in conjunction with inter-agency collaborations.”