The Sunday News
Judith Phiri, Business Reporter
PRESIDENT Mnangagwa has gazetted Statutory Instrument 118A of 2022 entrenching the multi-currency system into law as announced by Finance and Economic Development Minister Professor Mthuli Ncube on Monday.
Prof Mthuli Ncube
The SI is titled Presidential Powers (Temporary Measures) (Amendment of Exchange Control Act) Regulations 2022.
The measures will run for the duration of the National Development Strategy 1 (2021-2025) (NDS1).
Among other measures, the regulations empower registered lenders, banks, or any financial institutions that lend foreign currency to receive repayment of the loan or credit in that foreign currency.
Announcing additional measures meant to stabilise the exchange rate and control inflation on Monday, Prof Ncube said:
“The Ministry of Finance and Economic Development has put in place the following measures to build further confidence. Entrenching of the multi-currency system in law, Government has clearly stated its intention of maintaining a multi-currency system based on dual use of the US dollar and the Zimbabwe dollar.
“However, the market lacks confidence that the multi-currency system is here to stay for the foreseeable future. To eliminate speculation and arbitrage based on this issue, the Government has decided to embed the multi-currency system and the continued use of the US dollar into law for a period of five years.”
He said another measure was entrenching the inter-bank market exchange rate in law with it now being determined by banks on a willing buyer- willing seller basis.
The Minister said the utilisation in all economic transactions of this formal rate was now made mandatory by law.
“While economic agents are free to price their goods in US dollars or Zimbabwe dollars, and there are no price controls, the equivalence of US dollar prices and Zimbabwe dollar prices for a commodity should be strictly based on the current interbank exchange rate as determined by the Willing Buyer Willing Seller rate,” added Minister Prof Ncube.
He said no discounting of prices for payments made in US dollars shall be allowed and the law provides for strict criminal and civil penalties including US dollar-based fines, suspension or cancellation of business/trading licences for offenders, amongst other penalties.
