SA Banks Deal Zim A Huge Blow By Refusing To Export US Dollar Notes, Fears US Sanctions
South African banks have added to Zimbabwe’s economic problems after they stopped supplying the country with United States Dollar notes.
The Reserve Bank of Zimbabwe and the local banks are struggling to pay miners in United States dollars as they are failing to import notes from South Africa. The South African banks made the decision as they afraid of being fined by the United States’ Office of Foreign Assets Control (OFAC).
This was revealed by Reserve Bank of Zimbabwe deputy director for Financial Markets William Manhimanzi at a post-2019 Monetary Policy Statement review meeting where he said,
Ordinarily, we import the cash from South Africa, and most of the banks, due to what we call de-risking issues, have now given us notice that they can no longer provide our own local banks with cash (US dollars), so we are in a Catch-22 situation…The only bank that remained was FNB, and they gave notice in December 2018 that they would no longer be supplying our own local banks with cash.
According to News 24,
Zimbabwe is under United States sanctions and unless otherwise authorised or exempt, transactions involving the greenback are penalised if they involve an entity or individual listed on the Specially Designated Nationals List (a list of individuals and entities under US sanctions).
The nature of the regulations, however, makes it difficult for foreign banks to know whether they are dealing with Specially Designated Nationals or not, hence the decision by most South African banks to de-risk from dealing with Zimbabwean institutions.
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