Zimbabwe dollar falls to US$403.18, but black market rate continues to soar

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The Zimbabwean dollar today averaged $403.1787 against the US dollar, closing the gap with the black market exchange rate, but it is less than half the slew rate which is now $820.

According to Zimpricecheck, the cash rate is $500 for the greenback while the mobile money rate is $650.

The local currency fell $11.87 in the auction market today from $391.5337 last week.

A total of $22.9 million was allocated today, with large companies receiving $19.2 million.

Finance Minister Mthuli Ncube has threatened to take tough action against all government contractors who “manipulate the exchange rate” by funneling funds into the foreign exchange black market and contributing to the exchange rate spiral and to price instability.

“The Financial Intelligence Unit will track and review all payments made to government vendors, to establish how the funds were used,” he said.

“Where it is determined that funds have been funneled into the illegal foreign exchange market, the affected bank accounts will be frozen indefinitely pending criminal investigations and prosecution of the affected companies and their directors and officers.

“Proceeds of illegal transactions will be forfeited to the state under the Money Laundering and Proceeds of Crime Act. Affected vendors, their directors and related companies will be blacklisted by the Authority of Zimbabwe public and regulatory procurement and will be prohibited from participating in any government tenders.

A number of measures announced by the government to support the local currency over the past two months have so far failed, indicating that those manipulating the currency are likely ‘big fish’ that the government cannot control. .

A lawmaker suggested that those who manipulated the local currency should be imprisoned instead of fined, as they had enough money to pay any fines and would continue their business after paying the fines.

Source: The Insider

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