Illegal foreign currency dealers in Zimbabwe to face up to 10 years in jail

Zimbabwe today gazetted a new law criminalising unlicensed currency trading in an attempt stem out a thriving parallel market for bank notes in the country.

The southern African nation is grappling with a severe cash shortage which has given rise to informal trade for currency.

Last November, the country introduced, bond notes, a surrogate currency which was pegged at par with the US dollar. The bond notes have however been devalued by up to 80 percent on various platforms.

Finance minister Patrick Chinamasa told Parliament that President Robert Mugabe today gazetted the Exchange Control Amendment Regulations (Statutory Instrument) which provide for jail terms of up to 10 years.

“These regulations will empower the police to arrest anyone trading in currency without a licence. Further it will allow the police to seize the cash found on the person suspected to be dealing in currency,” said Chinamasa.

‘Where we establish that the transactions were done through bank accounts, the regulations empower the freezing of those accounts.”

Chinamasa said the bond notes have helped boost exports and production besides providing a medium of exchange which cannot be externalised. However, there is a thriving trade of the bond notes in neighbouring countries.

“To the allegation that bond notes have failed I categorically state that this is not the case. The problem is low circulation of currency because of lack of discipline and confidence. What is required is to enhance productive capacity so as to increase exports.”

Chinamasa said there was enough money circulating in the economy, with $1 billion physical cash — $180 million in bond notes, $20 million in bond coins and $800 million in United States dollar notes.

“With respect to the $200 million Afrexim Bank export incentive facility $180 million has already been issued which means the facility is about to be exhausted. RBZ is negotiating for a further $300 million to continue boosting exports which have grown by 12 percent to $2.334 billion as at September 8 compared to $2.086 billion last year,” said Chinamasa.

He added that $2.5 billion Treasury Bills were issued out as at June 30, with $127 million going towards the RBZ debt and $263 million towards recapitalisation of State Enterprises and Parastatals. – The Source

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