Zimbabwe, in a bid to stabilize its currency and clamp down on black-market trading, has introduced stringent regulations to penalize individuals and companies found violating the official exchange rate of its new currency, the ZiG.
Under the new rules announced by Finance Minister Mthuli Ncube, offenders will face a hefty fine of 200,000 ZiG or $14,782.
The move comes as the government seeks to enforce the sole use of the official exchange rate, which is determined daily by the Reserve Bank of Zimbabwe.
The decision to impose such a significant penalty underscores the seriousness with which Zimbabwean authorities are approaching the issue of currency stability.
By cracking down on those who flout the official exchange rate, the government aims to curb the proliferation of parallel markets and ensure the orderly functioning of the economy.
Previously, retailers were required to price their goods within 10% of the official exchange rate to prevent excessive profiteering.
However, this regulation has now been scrapped as it was deemed ineffective in curbing informal trading and maintaining the value of the currency.
The ZiG, introduced on April 5 as a successor to the Zimbabwean dollar, represents the country’s sixth attempt to establish a stable local currency.
Backed by 2.5 tons of gold and approximately $100 million in foreign currency reserves held by the central bank, the ZiG is intended to restore confidence in the nation’s monetary system.
Despite these efforts, the ZiG has faced challenges since its launch, including fluctuations in its value against major currencies.
Trading at 13.53 to the dollar as of Thursday, the currency experienced a record low of 13.67 to the dollar earlier in the week, highlighting the volatility inherent in Zimbabwe’s currency market.
The introduction of strict penalties for violating the official exchange rate reflects Zimbabwe’s determination to maintain control over its currency and stabilize its economy.
However, it remains to be seen how effective these measures will be in addressing the underlying issues contributing to currency instability and informal trading in the country.
