FIU targets last pockets of resistance . . . currency stability persists
The Sunday Mail
THE Financial Intelligence Unit (FIU) has set its sights on eliminating last pockets of resistance against the prevailing exchange rate stability.
This is after three leading hoteliers, two local authorities and several individual accounts were fingered for engaging in illicit financial transactions.
The Zimbabwe dollar has been enjoying sustained stability over the past two months, leading to a reduction of prices of goods and services, increased demand for the local currency and convergence of parallel market rates with the official exchange rate.
In an interview with The Sunday Mail on Friday, FIU director-general, Mr Oliver Chiperesa, said they had frozen accounts of leading hoteliers for pegging their exchange rates at US$1 to $1 200 at a time the official rate is US$1 to $614.
“We have had a special operation against hotels. We had noticed that hotels still remain among pockets of service providers that are still charging rates above $1 000 to 1 200 for US$1. We engaged three large hotel groups which were all converting their USD prices to Zimbabwe dollars using unjustified black market rates. We have had to freeze the accounts of those establishments,” said Mr Chiperesa.
He said after freezing of their accounts, the hotel companies agreed to align with prevailing market conditions.
“However, I am happy to say they are all in the process of rectifying their pricing structure. They have all acknowledged that they were not in compliance and are willing to comply and they are in the process of fixing their systems to comply. However, I have just decided not to name the hotel groups because they have been co-operating. It should be noted that if we encounter any problems with them after this warning we will not hesitate to name and shame them.”
A fortnight ago, the FIU froze foreign currency accounts for Harare City Council (HCC), which had pegged prices of some services exclusively in foreign currency. HCC, however, reversed the exclusive US dollar pricing following a full council meeting on Thursday.
Mr Chiperesa said two other local authorities, Bulawayo and Kwekwe City Councils were ordered to reverse their illicit pricing.
“We have specifically engaged these local authorities. They were offering discounts on USD payments that were beyond the 10 percent permissible on the willing buyer willing seller rate,” he said.
The FIU boss said effectively, Bulawayo City Council was making customers pay at parallel market rates when discounts they were giving on USD payments are factored in.
He said they had decided against freezing accounts of the two local authorities as they had owned up to their errors when the FIU engaged them.
“They rectified that so we are happy. As for the rest of the local authorities, we haven’t received complaints and we are giving them an opportunity to comply before we go back to them again. So we want to think they are complying.
“But we want to urge the members of the public to approach us when they encounter such situations. The public should let us know whenever they are charged at outrageous parallel market rates or forced to pay exclusively in US dollars.”
Individuals whose accounts have been suspected to be used in illicit deals, especially company directors, were also not spared, as they had their accounts frozen.
Measures that have been implemented by authorities have left the parallel market on the verge of collapse.
Yesterday, some parallel market dealers in Harare were offering $600 in cash for US$1, below the $614 official exchange rate.