Businesses comply with latest forex usage regulations

01 Jun, 2021 - 00:06 0 Views
Businesses comply with latest forex usage regulations Mr Denford Mutashu

The Chronicle

Oliver Kazunga, Senior Business Reporter
BUSINESSES have started complying with the latest foreign currency usage regulations while industry leaders are expected to meet the Government this week to deliberate on concerns arising from the new monetary policy regime.

The meeting is expected to weigh the implications of Statutory Instrument (SI) 127 of 2021, which was announced last week and compels business to peg prices of goods and services in line with the official exchange rate. The new regulations penalise those found on the wrong side of the law including businesses refusing to transact in the local dollar.

Confederation of Zimbabwe Retailers president, Mr Denford Mutashu said his association together with the Ministry of Finance and Economic Development will be hosting a breakfast meeting tomorrow to deliberate on the impact of the new SI.

“CZR and the Ministry of Finance will host a joint breakfast meeting on Wednesday in Harare before setting a date for Bulawayo and other centres.

“We will come out and through to the market to explain the impact of the recently promulgated Statutory Instrument 127 of 2021,” he said yesterday.

“The Deputy Minister of Finance (Clemence Chiduwa) will be the guest of honour at that event and the Governor of the Reserve Bank (Dr John Mangudya) will also come through to try and explain the impact of the policy to business and the monetary policy environment as well as the general public.”

Zimbabwe National Chamber of Commerce chief executive officer, Mr Christopher Mugaga and the Confederation of Zimbabwe Industries president, Mr Henry Ruzvidzo, will also attend.

Following the gazetting of the SI, some businesses and retailers had expressed reservations arguing that the new regulations might frustrate the business mood. However, a survey carried out by this paper in the Central Business District in Bulawayo yesterday showed that businesses such as service stations, hardwares and retailers were now accepting all the modes of payment.

“We have been directed by management to accept the US-dollar while the matter is being attended to. Maybe after two or three weeks a decision would have been made whether to accept or refuse the US,” said one of the attendants at OK Jason Moyo branch in Bulawayo. The retailer had temporarily suspended forex transactions after the announcement.

The survey showed some of the businesses were using the official exchange rate that was pegged at US$1: 84,71 while others still pegged their prices above the official rate.

Despite benefiting from the forex auction platform, the monetary authorities have expressed concern that enterprises were quoting prices above the official exchange rate. Those operating in the informal sector, a majority of them refuse local dollar transactions in favour of forex and would levy heavy premiums on those using Zim-dollar cash or electronic money.

According to Statutory Instrument 127 of 2021 Presidential Powers (Temporary Measures), firms that abuse the foreign currency obtained at the Foreign Currency Auction Trading System will be heavily penalised.

Under the new regulations, companies will be fined $50 000 or its equivalent in foreign currency for refusing to take payment in local currency at the official exchange rate. Financial institutions with clients that fall foul of the regulations will also be fined.

Since its introduction last year in June, the weekly Foreign Currency Auction Trading has received wide endorsement by the private sector and is credited for stabilising the exchange rate, which has led to price discovery. — @okazunga

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