Reserve Bank of Zimbabwe (RBZ) governor John Mangudya said that bank accounts belonging to several companies holding idle funds that were being used to speculate on currency have been sterilised.
The companies, which include Sakunda, Access Finance, Spartan Security, Croco Motors, among others, held about $1 billion paid from Treasury Bill maturities. Said Mangudya:
We have addressed the speculative tendencies that came with the increase in money supply; the reserve money. The money that increased due to increases in reserve money; we have sterilised it here at the bank.
In other words, the money that caused the increase in the exchange rate and therefore inflation; we have sterilised it and that is some of the money that we are going to redeploy for the agricultural sector this year.
The accounts were frozen by RBZ’s Financial Intelligence Unit (FIU) in September after the companies poured money into the parallel market to mop up the scarce foreign currency resulting in exchange rate instability.
The sharp fall in the value of the Zimbabwe dollar drove prices in the imports-dependent economy given the rate’s cost implications on imported products and pushed up inflation.