President Emmerson Mnangagwa, through the Presidential Powers (Temporary Measures) (Financial Laws Amendment) Regulations, 2021, introduced last week SI 127 of 2021 that forced businesses to use the US$1: ZWL$84 exchange rate.
The Statutory Instrument also made it illegal to give customers a discount for paying for goods or services in foreign currency, refuse to take local currency payments at the official exchange rate and issue Zimbabwe dollar receipts for goods paid for in foreign currency.
The Reserve Bank of Zimbabwe (RBZ) has posted some points to note on SI 127 of 2021. News Flash presents below the points as given by the central bank.The purpose of the S.I is to ensure that those obtaining foreign exchange from the auction system do not use parallel market rates.
1.The use of parallel exchange rates of above 100, for example, on funds obtained from the auction at ZW$85 to US$1 is not good for the economy and consumers. It is these anomalies or arbitrage opportunities that the S.I is designed to deal with.
2.The S.I is not designed to harm business but to provide a level playing field for business and to protect consumers.
3.The use of foreign currency for the payment of goods and services is still allowed as per S.I 85 of 2020.
4.Businesses have been given 2 weeks to regularise their systems so that they can comply with the SI on the receipting of goods & services in either foreign currency or local currency. The S.I is an essential means of enforcing compliance which is necessary for continued stability.
Reports suggest that the SI 127 of 2021 has caused great panic, confusion and chaos.