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Govt Under Pressure Over Runaway Parallel Exchange Rate

The government has not yet found a way around the runaway parallel foreign currency exchange rate which continues to pile pressure on macro-economic measures put in place to control inflation and currency stability.

In a statement Thursday, Minister of Finance and Economic Development, Professor Mthuli Ncube confirmed that the government was worried by illegal foreign currency trading and parallel market benchmarking of prices.

He announced additional measures meant to curb the runaway parallel exchange rate.

“The Zimbabwe Revenue Authority will be carrying out impromptu audits of corporate activities with a view of quantifying potential tax liabilities arising out of illegal foreign currency trading,” said the finance Minister.

“ZIMRA will also be carrying out compliance Audits with respect to compliance with the Location Tax introduced during the 2021 fiscal year. The FIU will continue to closely monitor and analyze financial transactions to identify, expose and take action against perpetrators of money laundering and other financial crime,”

The capacity of the FIU and other law enforcement agencies will investigate and prosecute violations of the Bank Use Promotion Act as well as various AMLCFT laws will be enhanced.

“Regulatory bodies including the Public Accountants and Auditors Board, will also be working on a framework to impose appropriate financial and professional sanctions on members of the accounting, auditing and other professions who may be complicit in superintending over illicit affairs by corporate entities which they are charged with running,”

“Businesses who disregard the law and continue price their goods on the parallel market rates will have their licenses suspended,” said Prof Ncube.

The Reserve Bank of Zimbabwe’s Financial Intelligence Unit has also announced that it is investigating allegations of currency manipulation and pegging of the Zimbabwe dollar at 200 against US$1 circulating on social media, with fast-foods outlet Simbisa Brands at the center of the storm.

Last month, eight financial institutions allegedly involved in foreign currency dealings in Harare through EcoCash bulk payer lines were hauled before the court and their cases are still pending.

Titanium Capital (Pvt) Limited, Dream High Investments (Pvt) Limited, Access Finance (Private) Limited, Tererati (Private) Limited, Vision Credit Source (Private) Limited, Capital Profit Financial Services, Raymond Mudonhi Investment (Private) Limited, Justice Mahuni, Kudzai Mudonhi, and Juso Global Limited, separately appeared at the Harare Magistrates Court charged with illegally dealing in foreign currency.

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