Finance Minister Mthuli Ncube has set a fine of ZiG200 000 to be paid by individuals and corporates found guilty of violating the country's exchange rate regulations.
Zimbabwe unveiled the Zimbabwe Gold (ZiG) currency on April 5 in a bid to find a lasting solution to exchange rates volatility, which authorities claimed was caused by the existence of the unsupported ZWL.
Details shared by the Reserve Bank of Zimbabwe (RBZ) indicate that the new ZiG currency is anchored on Gold, other precious minerals and a significant amount of foreign currency. The authorities have since assured a sceptical citizenry that any expansion in monetary supply will be undertaken via the route of increasing the reserves stocks as a starting point.
Just less than a fortnight after the launch of the ZiG currency, exchange rates on the parallel market plummeted by a whopping 19,7% and over 40% for the greenback's buyback trades.
In accounting for the factors behind the exchange rate depreciation, authorities jolted to blame parallel market traders and called for stiffer penalties to end the illicit dealings.
Some illegal foreign currency dealers have been arrested by the police although the suppressed trade continues to thrive underground.
In the Statutory Instrument 81A of 2024 released Thursday, Ncube set stiffer penalties to clamp down on businesses setting higher exchange rate premiums.
"In consultation with His Excellency, the President in terms of section 11 (2) of the Exchange Control Act hereby makes the following notice; Power of Reserve Bank to issue a civil penalty order to the Exchange Control Act (Chapter 9:23) is amended by the repeal of subparagraphs 12 and 13 and substitution of the following paragraphs -
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"A natural or legal person shall be guilty of a civil infringement if he or she, being a seller of goods or services, offers such goods at an exchange rate above the prevailing average interbank foreign currency selling rate published by the Reserve Bank of Zimbabwe.
"In the event of default in complying with the order shall provide for a combination of a fixed penalty of ZiG200 000 or an amount equivalent to the value of foreign charged for the goods or services in question whichever is the greater amount," the SI reads in part.
The instrument also ordered that a cumulative penalty over a period not exceeding ninety days of 5% of the outstanding amount of the fixed penalty for each day after the service of a Civil penalty order that the fixed penalty or any outstanding amount thereof remains unpaid by the defaulter shall be applied.
However, some experts have warned the Treasury against imposing such stiffer penalties arguing that they risk pushing the economy into further dollarization because they strip traders of the right to competitively charge goods in the local currency.
Other analysts contend that some businesses will end up increasing US$ prices to attain the required local currency pricing balances.
