Illegal forex dealers face 10 years in jail

Source: Illegal forex dealers face 10 years in jail – DailyNews Live

Blessings Mashaya  29 September 2017

HARARE – A new foreign exchange law in Zimbabwe will send unlicensed
foreign currency dealers to jail for 10 years.

Zimbabweans compare the new note with the US dollar note following the introduction of new notes by the Reserve Bank of Zimbabwe in Harare, Monday, Nov, 28, 2016. The Southern African nation has rolled out a new currency for the first time since 2009 in hopes of easing biting shortages of the US dollar. Banks across the country started issuing the new currency called bond notes, Monday(AP Photo/Tsvangirayi Mukwazhi)

The long-awaited law, approved by the Cabinet this week, is expected to
take effect as soon as Parliament promulgates it next month, Finance
minister Patrick Chinamasa (pictured below) told the National Assembly in
a ministerial statement yesterday.

“Trading in currency without a licence is an offence. The regulations make
it clear that anyone who deals in currency as commodity either at a
premium or at a discount commits an offence,” Chinamasa said.

The regulations are expected to be rammed through the bicameral
Parliament, where President Robert Mugabe enjoys a commanding two-thirds
majority in both houses.

Soon after the ushering in of bond notes as an export incentive last
November, US dollars have vanished from banks but are found in abundance
on the black market.

A bond note unit – limited for domestic commerce – was been fixed by the
RBZ to trade at par with one US dollar. But some retailers have low
confidence in the bond notes and place different price tags on goods
dependent on the currency used for payment.

Prices reflect that one US dollar in hard cash is equivalent to $1,40 in
bond notes, meaning that the surrogate currency has already lost 40
percent of its value. Zimbabwean firms resorting to the black market in
search of US dollars pay a premium of up to 60 percent.

Chinamasa threatened to invoke the new law which will jail anyone trading
the fiat currency at a rate apart from what they had officially imposed, a
situation that clearly undermines market forces, hence influencing the
exchange rates of all currencies trading in the country.

Chinamasa also ruled out price controls. This comes as shortages of basic
goods and fuel have resurfaced, sparking panic buying by consumers.

Prices of imported products have also skyrocketed, which businesses blame
on shortages of foreign exchange.

“I said in Cabinet I am opposed to the introduction of price controls, it
will worsen the situation, this situation need to be solved in a friendly
manner,” he told the National Assembly.