New regulations to enforce official exchange rate gazetted

GOVERNMENT has gazetted new regulations to compel businesses to peg prices of goods and services in line with the official exchange rate and penalise those refusing to transact in the local dollar.

According to Statutory Instrument 127 of 2021 Presidential Powers (Temporary Measures) promulgated this week, firms that abuse the foreign currency obtained at the Foreign Currency Auction Trading System will be heavily penalised.

Under the new regulations, companies will be fined $50 000 or its equivalent in foreign currency for refusing to take payment in local currency at the official exchange rate. Financial institutions with clients that fall foul of the regulations will also be fined.

Since its introduction last year in June, the weekly Foreign Currency Auction Trading has received wide endorsement by the private sector and is credited for stabilising the exchange rate, which has led to price discovery.

The local dollar has remained stable against the US-dollar, trading at 1:84,71 this week with negligible fluctuations, according to the Reserve Bank of Zimbabwe.

However, some businesses have been quoting prices above the official exchange rate despite benefitting from the forex auction platform. Others, mainly those operating in the informal sector, refuse local dollar transactions in favour of forex and would levy heavy premiums on those using Zim-dollar cash or electronic money.

Accordingly, businesses trading at the forex auction will now be required to state the purpose for which they require the forex resources.

Diverting the forex obtained from the auction for other purposes will now be a punishable offence attracting a penalty of $1 million or its equivalent in foreign currency.-chronicle.l.zw