By Nandipha Moyo
The Ministry of Finance and Economic Development announced on Thursday additional measures to curb illegal foreign currency exchange dealings and pricing on the parallel market.
In a statement Finance Minister , Professor Mthuli Ncube , said benchmarking was as a result of the demand for foreign currency was high on the parallel market.
” In the intervening period, government has also improved access to foreign currency by all bona fide businesses and individuals through the auction system.
However, a residual core foreign currency demand, fueled mainly by speculative, and store of value demand for currency on one hand as well as criminal and money laundering activities on the other, has perpetuated and sustained the parallel market for foreign currency.
The result has been that despite large and small corporates, SMEs and individuals having access to the RBZ auction system, the existence of the parallel market has provided an opportunity for price benchmarking at parallel market rates notwithstanding the fact that some of the businesses are accessing their full requirements for foreign exchange via the official channels. These practices were the intended targets of S1127 ” , reads the statement.
According to Minister Ncube this has provided an opportunity for price benchmarking at parallel market rates notwithstanding the fact that some of the businesses are accessing their full requirements for foreign exchange via the official channels.
Some of these measures include the Financial Intelligence Unit investigating and prosecuting those in violation of the Bank Act.
Regulatory bodies will be put in place to include a public accountants and auditors board who will be working on frameworks to impose appropriate and financial, auditing and other professions who may be complicit in illicit affairs by corporate entities.
The new measures come as a response to the exchange rate on the parallel market which skyrocketed to an equivalent of ZW$200 : USD$1 with the Reserve Bank of Zimbabwe’s Financial Intelligence Unit investigating manipulation on the parallel market .
Economist Titus Mukove says demand is too high hence the hike in the exchange rate on the parallel market .
He seconded the intervention by the FIU to address certain forces which are causing the parallel market to thrive.
“We have too much demand compared to what is being supplied because our levels of export are extremely law . The important thing is to address the things that are causing the parallel market to thrive.”
Meanwhile The Financial Intelligence Unit is also investigating foreign exchange benchmarking by Simbisa Brands which was fingered on allegations of selling products using the parallel market rate by members of the public who circulated a receipt from Bakers Inn which showed a Russian and Chips Combo sold for US$1 or ZWL$200.
The official bank rate week ending October 8 is US$1: ZWL85.