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Zimbabwe announces fining businesses for not using official exchange rate


FILE — A cashier is pictured as she dispenses Zimbabwe's new ZiG currency, at a supermarket in Harare on April 30, 2024.
FILE — A cashier is pictured as she dispenses Zimbabwe's new ZiG currency, at a supermarket in Harare on April 30, 2024.

Zimbabwe will fine businesses using inflated exchange rates as the government battles to maintain the value of its newly introduced gold-backed currency, the Zimbabwe Gold, ZiG.

Any business using an exchange rate other than the official rate of 13.5 ZiG per U.S. dollar will be liable for a fine of 200,000 ZiG ($14,815), according to a government notice seen by Reuters news.

Anyone offering "goods or services at an exchange rate above the prevailing interbank foreign currency selling rate" would be guilty of a civil infringement, read the notice, issued late on Thursday.

Zimbabwean authorities have been making efforts to keep the ZiG afloat since its introduction in early April, with President Emmerson Mnangagwa's administration launching a blitz on illegal foreign currency traders last month.

Some businesses such as supermarkets have been charging a premium above the market rate for customers paying in the new currency, while the ZiG is being rejected by informal traders.

Zimbabwe's Treasury on Tuesday moved to enforce the use of the ZiG as the official unit of exchange for transactions.

Inflation rates in Zimbabwe were at 57 percent following the introduction of the new currency.

Professor Gift Mugano, the director for African Governance and Development at South Africa’s Durban University of Technology, says Zimbabwe's new currency alone could not address the nation’s economic woes.

Zimbabwe's problems will be addressed when its economic output increases, allowing it to earn foreign currency and create demand for the ZiG, Mugano said.

Despite Mugano's skepticism, some Zimbabweans remained optimistic that the new currency would help the nation return to its status of being the "breadbasket of southern Africa."

Philip Manyonganise, a Zimbabwean who spoke to media while in a queue outside a bank to withdraw the ZiG, said the new currency "has value" in comparison "to the past currency," in reference to the Zimdollar.

The introduction of the ZiG marked Zimbabwe's fourth attempt at having a local currency within a decade. The southern African nation dumped the Zimdollar last month after it lost 70% value since the start of the year.

Some information from this article was sourced from Reuters and Agence France-Presse.

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