Zimbabwe freezes Chinese firm’s account over currency manipulation

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HARARE (Reuters) – Zimbabwe’s central bank has frozen an account of a Chinese company it accused of manipulating the local currency, which lost ground against the dollar on the black market this week.

The southern African nation reintroduced the Zimbabwe dollar last June, ending a decade of dollarisation, but this resulted in runaway inflation, which economists say reached 520% in December.

Reserve Bank of Zimbabwe (RBZ) governor John Mangudya, in a statement late on Friday, singled out unlisted China Nanchang as a currency manipulator.

Mangudya said the RBZ financial intelligence unit (FIU) had identified Nanchang as a company that had used millions of Zimbabwe dollars to buy greenbacks on the black market, weakening the local unit.

Nanchang is the major contractor for the construction of a dam that is set to supply water to Zimbabwe’s drought-hit second biggest city Bulawayo, among other government contracts.

“The FIU has ordered the freezing of the identified account pending further analysis and is undertaking ongoing surveillance to identify more culprits involved in the parallel market transactions,” Mangudya said.

The central bank did not say if the account was held with RBZ or with another bank.

A spokesman for Nanchang could not immediately be reached for comment.

The Zimbabwe dollar was trading at 25 to the U.S. dollar on the black market on Saturday compared to 22 last week. On the official market, the local currency was pegged at 17.

Last year, the central bank temporarily froze accounts belonging to four companies over the same charges.

A weakening currency along with shortages of cash, foreign exchange, fuel and electricity are among symptoms of Zimbabwe’s worst economic crisis confronting President Emmerson Mnangagwa’s government.

Reporting by MacDonald Dzirutwe; Editing by Giles Elgood

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Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.

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