THE United States dollar remains legal tender in the country and the newly gazetted regulations requiring businesses accessing foreign currency through the Reserve Bank of Zimbabwe (RBZ) foreign exchange auction system to use the official exchange rate in their pricing mechanisms are meant to curtail market indiscipline.
Statutory Instrument 127 of 2021, gazetted last week, imposes penalties on businesses accessing foreign exchange on the RBZ platform and then proceed to peg their prices using parallel market rates.
Responding to questions on the statutory instrument yesterday, RBZ Governor Dr John Mangudya said the new regulations were not designed to harm businesses but to enforce market discipline and eliminate arbitrage.
He said businesses pegging their prices using parallel exchange rates after accessing forex from the auction system were operating unfairly and their actions were bad for the economy and consumers.
Promulgation of the regulations saw some large scale retailers yesterday refusing to accept foreign currency at the tills, asking customers to first exchange their forex at bureau de-changes in-store.
However, Dr Mangudya said the use of foreign currency for the payment of goods and services was still allowed.
“The purpose of Statutory Instrument 127 is to ensure that those obtaining foreign exchange from the auction system use the market exchange rate which is within the auction weighted exchange rate or the auction bid range,” he said.
“The use of parallel exchange rates of above 100, for example, on funds obtained from the auction system at $85 to the US$ is not good for the economy and consumers.
“It is these anomalies or arbitrage opportunities that the Statutory Instrument is designed to deal with.
“It is not designed to harm business but to provide a level playing field in business and to protect consumers.”
Dr Mangudya said businesses have been given a grace period of two weeks to comply with the new regulations.
“Businesses have been given two weeks to regularise their business operating systems to comply with the Statutory Instrument on the receipting of goods and services in either foreign currency or local currency,” he said.
“This is essential to minimise arbitrage on foreign exchange obtained from the auction system.
“This Statutory Instrument is therefore important to enforce compliance which is necessary to continue to stabilise the economy.”
Some businesses had yesterday started rejecting either the local currency or forex as a way of circumventing the new regulations.
They however, risk being penalised under the new regulations.
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.
Diverting 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.
In addition, 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.