Gvt to defend economic stability

Staff Reporter

… As it declares war on illegal foreign currency trade

Government through the Reserve Bank of Zimbabwe (RBZ) and the Financial Intelligence Unit (FIU), has intensified efforts of identifying and prosecuting illegal foreign currency dealers that are fuelling economic instability.

The Minister of Finance and Economic Development, Professor Mthuli Ncube, condemned the illegal trade in foreign currency and the indexing of prices of goods and services at parallel market rates, which he said had a potential to usher back micro-economic instability.

“The recent resurgence of these practices, which have been identified as significant contributors to price instability in the economy and are imposing significant downside risks to macro-economic stability, and the erosion of domestic and international competitiveness is therefore a cause for serious concern,” said Minister Ncube.

Minister Mthuli indicated that the measures being taken by the RBZ and the FIU to bring an end to the illegal foreign currency dealings have the full backing of the Government.

“ZIMRA will be carrying out impromptu audits of corporate activities with a view of quantifying potential tax liabilities arising out of illegal foreign currency trading; 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 analyse financial transactions to identify, expose and take action against perpetrators of money laundering and other financial crimes; also the capacity of the FIU and other law enforcement agencies to investigate and prosecute violations of the Bank Use Promotion Act as well as various AMLCFT laws will be enhanced,” Minister Ncube said.

The public has also been advised to report to the FIU and the National Economic Conduct Inspectorate all business entities directly or indirectly benchmarking prices at parallel market rates.

Meanwhile, the Second Republic had managed to bring macro-economic stability in the 3 years it has been in office, a development that has seen rapid growth of privately held foreign currency reserves from levels of around US$300 million in 2018, to US$1.8 billion currently held in Zimbabwean banks. 

According to Prof Ncube, official reserves have also increased from less than US$100 million to over US$1.2 billion currently, which includes, the US$960 million recently availed by the IMF to Zimbabwe.