gtag('config', 'UA-12595121-1'); RBZ to blacklist firms snubbing forex auction – The Zimbabwe Mail

RBZ to blacklist firms snubbing forex auction

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RESERVE Bank of Zimbabwe (RBZ) governor John Mangudya has threatened to blacklist firms that do not liquidate their foreign currency on the forex auction as well as purchase the currency on the same platform, only to sell their products at a premium.

Since the first foreign currency auction started on June 23, the depreciation of the Zimbabwean dollar against the United States dollar has slowed down on the parallel market although the local currency remains volatile.

“It would appear that in this economy, people always need to be forced to comply,” Mangudya said during a virtual conference on taxes yesterday.

“It is not part of my DNA but it appears that this is the DNA for Zimbabweans and it is a great concern.

“So you ask, what do you do with those people who are coming to the auction buying at $82 and selling at $95 (against the greenback)?”

He added: “For us to know this thing, that is malpractice, it is because some have complained to us, otherwise we won’t know. If you go to the shops, there is an implied exchange rate that they are using. Go to the pharmacist, they use $100, $110 or $95 but they come here at the auction to buy at $82. Now what do we do with them?

“This is why we have toll-free number we enforce compliance on those entities that are doing those malpractices. Obviously, the sanctions that are going to be there are very simple. If you do not want to comply, it means that we blacklist you from coming to the auction.”

Further, experts say since the start of the foreign currency auction on June 23, the government has been the main funder of the platform.

Experts say this is based on the fact that the weekly allotted auction amounts have remained on the lower end and largely unchanged.

“The central bank is funding this foreign currency auction from the average of 30% to 35% forex retention it keeps from exporting proceeds,” said a source.

Mangudya said the economy was now a “mid-term dollarised economy” and there was enough foreign currency in the market considering that the total foreign currency deposits stood at US$1,1 billion as of last week, from US$840 million in January.

Source – newsday