Forex dealers resort to Ecocash

By Dakarai Tembo

Statutory Instrument 142 of 2019 has tightened screws on illicit foreign currency dealers, forcing them to resort to Ecocash for their illegal trading, The Harare Post has established.

 The increase in appetite by the banking public to conduct their transactions on the interbank market has exacerbated the situation for illegal foreign currency dealers.

The move by the Reserve Bank of Zimbabwe (RBZ) to monitor the movement of funds resulted in most banking institutions being hesitant to participate on the parallel market. This coupled by the willing buyer willing seller determination of exchange rate, swayed most entities from the risky parallel market.

A snap survey by this publication established that most of the foreign currency dealers were, thus shut out of the banking system left with an option to then transact on Ecocash, a facility run by Econet Wireless.

A foreign currency dealer, who only identified himself as Monya confided that “Ecocash is now our only option where we are trading cash for premiums of up to 40 percent in exchange for electronic money. There is generally an increase in the demand for local currency following the banning of the multi-currency system.”

He added that “the demand for cash is inspired by opportunities that exist between the cash exchange rate and Ecocash exchange rates on the parallel market. This has seen most of the Ecocash agents abandoning their core business of performing cash-in and cash out transactions. They now concentrate on buying and selling cash.”

The unscrupulous dealings by foreign currency agents, however, irked most economic analysts who urged Government to move on the agents and whip them in line saying they are undoing efforts by Government to nip the parallel market.

An economist, Tawanda Jokonya, appealed to Econet Wireless to withdraw licenses of the errant Ecocash agents. “It is instructive for Econet Wireless to withdraw licenses of those agents found wanting on this matter. The Central Bank on the other hand, should also sharpen supervisory and surveillance systems for mobile payment platforms.”