Treasury warns no mess for currency exchange regulations violations

Prof. Mthuli Ncube
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THE Treasury has issued a stern warning to businesses, emphasizing severe penalties for those found pricing their products or services using an exchange rate higher than the official rate.

This announcement follows the removal of the legal provision allowing traders to put a 10 percent margin above the ruling interbank exchange rate.

Despite ongoing challenges in accessing foreign currency through the interbank market, Treasury officials maintain that there is no longer any justification for businesses to deviate from the official exchange rate. Any violations of this regulation will result in penalties, with a minimum fine of ZiG200,000 per offense.

The change in regulations was formalized through Statutory Instrument 81A of 2024, which also outlines civil penalties for defaulters. Additionally, there are extra penalties for delayed payments beyond 90 days.

Finance, Economic Development, and Investment Promotion Minister, Professor Mthuli Ncube, emphasized that the introduction of the new currency, the Zimbabwe Gold (ZiG), removed the rationale for setting prices above the interbank rate. He reiterated the government’s commitment to stabilizing the currency and discouraging unnecessary speculation.

However, some business leaders argue that the limited supply of foreign currency in the formal market forces them to procure forex from other sources, including the parallel market. Despite the introduction of ZiG, businesses continue to struggle with forex shortages, impacting their ability to import raw materials and maintain profitability.

Zimbabwe National Chamber of Commerce CEO, Chris Mugaga, emphasized the importance of addressing the entire supply and demand chain for foreign currency, rather than focusing solely on currency stability. He highlighted the challenges faced by businesses in accessing forex from banks, leading many to rely on the black market.

There is confusion within the business community regarding the new regulations, with some interpreting them to allow pricing based on the exchange rate at which forex was purchased from banks. Central Bank Governor Dr. John Mushayavanhu indicated that a clarification statement would be issued in response to these concerns.

As the government seeks to enforce exchange rate regulations, businesses must navigate the evolving economic landscape to ensure compliance while addressing their operational needs in a challenging forex environment. – Business Weekly