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Oliver Kazunga, Senior Business Reporter
THE Reserve Bank of Zimbabwe (RBZ) has released names of 18 entities that are facing penalties for abusing the foreign exchange auction system.

The Government towards the end of May announced Statutory Instrument 127 of 2021 Presidential Powers (Temporary Measures), which states that firms that abuse the foreign currency obtained at the Foreign Currency Auction Trading System will be heavily penalised.
In a statement, RBZ said:

“After investigations by the Financial Intelligence Unit and the bank’s Exchange Control Division, the entities listed hereunder which were abusing the foreign exchange auction system shall be dealt with in accordance with SI 127.”

The entities facing the penalties are National Foods (Pvt) Ltd, Georgia Petroleum (Pvt) Ltd, Tettola Investments (Pvt) Ltd, Africa Steel (Pvt) Ltd, Westvillle Investments (Pvt) Ltd (T/A Omni Africa), Flicknik Enterprises (Pvt) Ltd, Duo Valley Commodity Brokers and Faircclot Investments.

GlenuLas Trading, Natural Stone Export Company, Nuvert Trading, Phirebrook Investments, Classic Energy, Clorex Energy, Explochem, Mutare Mart & Exchange, Souzrce Fuels, and Kimya Investments are also part of the list.

SI 127 of 2021 also compels business to peg prices of goods and services in line with the official exchange rate and penalises businesses for refusing to transact in the local dollar.

The businesses that refuse to take payment in local currency at the official exchange rate are fined $50 000 or its equivalent in foreign currency.

“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 non-compliance with anti-money laundering rules and regulations,” it said.

The monetary authority said its focus on the above 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.

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.

As at last week’s auction, the Zimbabwe dollar traded at 85,07 against the United States dollar the previous week’s rate of 84,76.

A total US$34,8 million was awarded to bidders at both the Small to Medium Enterprises and Main auctions while a total of US$38,5 million was allotted at the two auctions the previous week.

Since the introduction of the weekly Foreign Currency Trading System, the Central Bank has continued to meet the forex demands on the platform. — @okazunga.