The Reserve Bank of Zimbabwe (RBZ) has directed all banks to temporarily lower daily and monthly instant inter-bank transactions in a bid to bring the exchange rate under control.

Under the new directive, daily limits through the ZIPIT platform will go down to 20,000 Zimbabwe dollars (800 U.S. dollars) per day from 100,000 Zimbabwe dollars. The monthly limit, which previously had no limit, has been reduced to 100,000 Zimbabwe dollars.

ZIPIT is a financial services system in Zimbabwe that allows individuals to send money electronically from one bank account to another using the bank’s mobile banking platform through USSD or an application.

The central bank’s Financial Intelligence Unit (FIU) said the lack of caps in transactions was leading to rampant illegal foreign currency trading.

“The FIU has noted that the existing ZIPIT transaction limits which have no monthly cap are being misused, primarily for illicit foreign currency transactions,” the FIU said in a statement.

The Unit said it had noted some shortcomings in the ZIPIT system that makes it difficult for banks, regulators and law enforcement agencies to speedily identify counter-parties to a transaction, or to identify multi-banked users.

The FIU said until such time when adequate safeguards are built into the ZIPIT system to minimize the money laundering risk, banks will be required to adhere to prescribed daily and monthly limits.

Earlier this month the central bank directed all banks in the country to freeze over one hundred bank accounts linked to mobile money agents suspected of involvement in illicit foreign currency trading or money laundering.

Zimbabwe is currently battling historical levels on inflation and illegal money traders have been blamed for exacerbating the Southern African country currency woes.

Official figures from the Zimbabwe National Statistics Agency show that year-on-year inflation in March 2020 stood at 676 percent. Enditem

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