Zimbabwe will fine companies that do not use the official new exchange rate. By Reuters

2 Min Read

LYNXMPEK49069 L

HARARE (Reuters) – Zimbabwe will fine companies that use inflated exchange rates as the government battles to preserve the value of its newly introduced gold-backed currency, Zimbabwe Gold (ZiG).

Any company using an exchange rate higher than the official rate of 13.5 ZiG per US dollar will be liable for a fine of 200,000 ZiG ($14,815), according to a government notice seen by Reuters.

Anyone who “offers goods or services at an exchange rate that is higher than the prevailing interbank foreign exchange retail rate” would be guilty of a civil violation, the notice issued late Thursday said.

The government has been scrambling to keep the ZiG afloat since its launch in early April, with authorities launching an attack on illegal currency traders last month.

Some businesses, such as supermarkets, charge a premium above the market rate for customers who pay in the new currency, while the ZiG is rejected by informal traders.

Zimbabwe’s Ministry of Finance on Tuesday took steps to enforce the use of the ZiG as the official unit of exchange for transactions.

This is Zimbabwe’s fourth attempt to have a local currency in a decade, with the southern African country dumping the Zimdollar last month after it lost 70% of its value since the start of the year.

See also  The dollar's dominant status as a reserve currency will continue, says Reuters' Morgan Stanley
Share This Article
Leave a comment

Leave a Reply

Your email address will not be published. Required fields are marked *