Mthuli Ncube Introduces ZiG200,000 Fine for Exchange Rate Violations

May 10, 2024
RBZ | Report Focus News

Finance Minister Mthuli Ncube has announced a ZiG200,000 fine for traders found violating exchange rate regulations. The new penalty targets individuals and corporates who set prices above the official exchange rate.

Zimbabwe introduced the Zimbabwe Gold (ZiG) currency on April 5 to address exchange rate volatility attributed to the unsupported ZWL. The currency is backed by gold, other minerals, and foreign currency reserves.

Following the ZiG currency launch, parallel market exchange rates dropped significantly, prompting authorities to blame illegal traders and advocate for stricter penalties.

Minister Ncube, in Statutory Instrument 81A of 2024, imposed harsher penalties on businesses setting high exchange rate premiums. Offenders face a fixed penalty of ZiG200,000 or the equivalent of the foreign currency charged, whichever is greater. Additionally, a cumulative penalty of 5% per day may be applied for unpaid fines.

Critics warn that such penalties could accelerate dollarization and hamper local currency competitiveness. Some businesses may increase USD prices to align with local currency requirements.