Zimbabwe is host to international banks, such as Standard Bank, Standard Chartered, Barclays, and regional finance institutions, such as Ecobank and Nedbank controlled MBCA, in addition to a host of other locally owned banks.
John Robertson, a renowned economist in Zimbabwe, said on Friday that the international banks were terminating their corresponding bank partnerships with Zimbabwe to avoid potential fines by the US.
He said banks were battling liquidity shortages that were making it difficult for them to be effective, while their operations were being worsened by international partnerships that were reluctant to deal with Zimbabwe because of its high risk perception.
â€œThere is a growing high risk perception on Zimbabwe and the liquidity situation is worsening,â€ he said.
â€œInternational banks are more and more unwilling to deal with Zimbabwean banks because of the sanctions and because of the high risk perception,â€ he added.
The US Department of the Treasuryâ€™s Office of Foreign Assets Control fined Barclays $2.5 million (about R40.4m) this month, saying the penalty â€œhighlights the importance for institutionsâ€ to take appropriate measures to â€œensure compliance with US economic sanctions laws when processing transactionsâ€.
It has now emerged that the industry is changing its intermediary banks from banks in Germany to others in countries such as South Africa and China.
Despite banks in Harare this week scrambling to find replacement intermediary banks, the Reserve Bank of Zimbabwe governor John Mangudya said last week that â€œthe banking sector is sound and safeâ€.
Zimbabwe has been pushing for the adoption and increased usage of the Chinese yuan, saying the US dollar is driving down the local economyâ€™s competitiveness as it is stronger against major trading partner currencies such as the rand, Japanese yen and Chinaâ€™s yuan.
Zimbabwe this year announced strict measures to curb financial outflows from the liquidity-starved economy. The measures include disallowing free funds and increased monitoring of corporate account activity, while other transactions will now require approval.
Trade relations between Zimbabwe and the US, although still notable, have weakened because of the frosty relations while some US firms have divested out of Zimbabwe.
Mugabe says the US is punishing his government for taking back black peopleâ€™s land.Post published in: Business