Harare. (Timothy Marks/Getty)
Zimbabwe will impose penalties on individuals and businesses who do not use the prevailing official foreign exchange rate for their new currency, ZiG, in their transactions.
Finance Minister Mthuli Ncube said in a statement on Thursday that the government would impose fines of Zig 200,000 (R270,000) on companies and individuals who violate the rules. The Treasury Secretary had warned on Tuesday that regulations were looming that would force the Reserve Bank of Zimbabwe to use the exclusive use of the official exchange rate set daily.
The government has made ZiG's official exchange rate the only standard for currency transactions to avoid suppressing the parallel market.
The new rules also abolished the previous requirement that retailers price their goods at a profit of no more than 10% of the official exchange rate. This regulation made goods more expensive and therefore less competitive against informal traders in the race for dollars.
ZiG (short for Zimbabwe Gold) was announced on April 5 to replace the Zimbabwean dollar, which has lost 80% of its value this year. The new unit will be the southern African country's sixth attempt to introduce a functioning local currency. The funding is backed by 2.5 tonnes of gold and about $100 million in foreign exchange reserves held by the central bank.
ZiG banknotes and coins were released to the public late last month.
ZiG was trading at $13.53 on Thursday, according to data posted on the central bank's website. On Monday, the dollar fell to $13.67, the lowest level since its opening a month ago.
