By Nyasha Mutena
The Reserve Bank of Zimbabwe Governor Dr John Panonetsa Mangudya will penalize 18 companies for abusing the foreign exchange auction system.
This development has been necessitated by Statutory Instrument 127 of 2021 which saw Dr Mangudya engaging quite a number of business associations over the past 2 weeks to discuss the modalities for compliance with SI 127/2021.
These engagements culminated in a thorough understanding of the essence of Statutory Instrument 127 of 2021 .
In a statement this morning, Dr Mangudya said;
“It is against these noble objectives that SI 127 was put in place to provide for penalties against errant entities that were at the forefront of abusing the foreign exchange auction system to the detriment of the stability of the economy,” he said.
“Accordingly, after investigations by the Financial Intelligence Unit and the Bank’s Exchange Control Division, the 18 entities which were abusing the foreign exchange auction system shall be dealt with in accordance with SI 127.”
To be punished are National Foods (Pvt) Ltd, Georgia Petroleum (Pvt) Ltd, Tettola Investments (Pvt) Ltd, Africa Steel (Pvt) Ltd 5, Westvillle Investments (Pvt) Ltd, (T/A Omni Africa), Flicknik Enterprises (Pvt) Ltd, Duo Valley Commodity Brokers, Fairclot Investments, GlenuLas Trading and Natural Stone Export Company.
Also, Nuvert Trading, Phirebrook Investments, Classic Energy, Clorex Energy, Explochem, Mutare Mart & Exchange, Souzrce Fuels and Kimya Investments.
Dr Mangudya added;
“Going forward and in line with the recommendations from the business community on the need to continue to enhance stability in the economy, the Bank’s efforts to foster compliance in terms of SI 127 shall be limited to outliers that wantonly abuse the foreign exchange auction system, exchange rate manipulation and noncompliance with anti-money laundering rules and regulations.”
“The Bank’s focus on these key areas, coupled with business’s reality check, self-discipline, self-monitoring and peer-review, will sustain inflation and exchange rate stability that are necessary for the economy to continue to rebound,” he also said.
The SI empowers the RBZ to enforce and penalise offenders of exchange control regulations mainly relating to trading on the foreign currency auction, exchange rates and acceptance of the local currency as legal tender under the multi-currency regime.
Economic agents that misuse foreign currency obtained from the currency auction system, trade at an exchange rate other than the official exchange rate and refuse to accept payment in Zimbabwe Dollars without prior approval from the RBZ shall be guilty of an offence and liable to a fine.