Those businesses refusing to transact in the local dollar
will also be penalised, according to the latest Statutory Instrument 127 of
2021, gazetted under Presidential Powers (Temporary Measures) (Financial Laws
Amendment) Regulations, 2021.
The new SI gives the central bank powers to impose the
penalties in the event of default in complying with Exchange Control
regulations that govern use of funds obtained from the forex auction.
Under the new regime, businesses 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. Those found guilty of 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.
Accordingly, businesses trading at the forex auction will
now be required to state the purpose for which they require the forex
resources.
Also gazetted under Statutory Instrument 127 of 2021 is
penalisation of natural or legal person guilty of being a seller of goods or
services not authorised by law to charge for them exclusively in foreign
currency.
This includes businesses and individuals that refuse to
allow any buyer to tender payment for them in Zimbabwe dollars at the ruling
exchange rate.
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 benefiting 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.
Finance and Economic Development Minister, Professor Mthuli
Ncube, says the new regulations have been put in place to protect consumers
from being abused by manipulative business players.
He told tourism players during a brief with sector players
Thursday that the new fines and penalties would help curb speculative behaviour
and close arbitrary opportunities that threaten the stability achieved so far.
“We really want to curb this and make sure consumers are
not hurt or exploited. The economy is stable and the exchange rate is stable,”
said the minister.
Contacted for comment, Confederation of Zimbabwe Retailers
(CZR) president, Mr Denford Mutashu, admitted that pricing in most shops was
not reflective of the official exchange rate and that this has created market
distortions.
“There have been a lot of machinations and unscrupulous
activities with the auction system itself and there are quite a number of
players unscrupulously accessing foreign currency on the auction system and
manipulating the way out to other unintended purposes,” he said.
“So, that needed to be addressed.” He, however, stressed
the need for adequate communication of the decision to avoid speculation, which
paints negative impressions.
Mr Mutashu said already some businesses were looking at the
regulations as some form of price controls highlighting that the forex auction
system has its own challenges and inefficiencies in terms of meeting and
funding the bids.
ZNCC chief executive officer, Mr Christopher Mugaga,
expressed his reservations on Twitter.
“Exchange rate is one of the most sensitive instruments,
which can build or completely destroy market confidence alongside interest rate
policy. @SI137 of 2021 is not implementable unless everyone had access to
forex-auction,” he posted. Herald
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