The Reserve Bank of Zimbabwe (RBZ), in a bid to stem the spiralling parallel market rates for the United States (US) dollar, has threatened to name and shame individuals who have borrowed large sums of money from banks.
On Tuesday, the local currency fell against the US dollar, trading at around $400 to the US dollar on the parallel market, while it is trading at around $280 on the interbank market.
Last week, President Emmerson Mnangagwa was forced to hurriedly announce measures aimed at stabilising the economy, which included suspension of lending by banks.
In a statement yesterday, the RBZ accused people who borrowed from banks of manipulating the official interbank market.
“In the wake of manipulation of the exchange rate by some borrowers of large amounts to the detriment of consumers, the bank reserves the right to publish the names of significant borrowers across the banking sector in the public interest,” read the statement.
Since 2020, the central bank has, to no avail, put in place several measures to halt the rapid depreciation of the local currency.
Last year, government embarked on a name and shame operation targeting companies and individuals accused of fuelling the galloping foreign currency parallel exchange rate.
It also introduced Statutory Instrument 127 of 2021 which prohibited business operators from charging above the official exchange rate and empowered authorities to punish those who refused to accept the local currency.
Analysts scoffed at the RBZ decision saying it would cripple the already ailing economy.
Economist Gift Mugano said: “It just shows they have run out of ideas. Borrowing money from a bank is a normal business transaction. There is nothing shameful about borrowing money from the bank, because it is legal. One is entitled to borrow as much money as he or she wants as long as they will be able to pay back. It is worrisome when policymakers come up with such policies. Unless they amend the Banking Act, which allows people to borrow money from the bank, there will be nothing wrong with borrowing money from the bank. But amending the Banking Act is as good as shutting down the economy.”
Lawyer Alex Magaisa said: “You want to ‘name and shame’ persons for ‘significant borrowing’, something that is wholly legal? When has ‘significant borrowing’ been an offence? If you know persons who have taken advantage of, and abused your rigged forex auction system, go ahead and take regulatory action. The source of manipulation of the exchange rate is you the RBZ and Finance ministry who created, and have maintained a rigged forex auction system that has plenty of room for arbitrage. Those with access to cheap forex, your elite mates, are taking advantage of the gap you created.”