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Mnangagwa taken to court

by Staff reporter
14 Mar 2020 at 23:57hrs | Views
THE Law Society of Zimbabwe (LSZ) has taken President Emmerson Mnangagwa to the High Court challenging last year's presidential decree which introduced the RTGS dollar, saying this deprived the organisation its money which was deposited in United States dollars.

In the application, LSZ cited Finance and Economic Development minister Mthuli Ncube, the Reserve Bank of Zimbabwe (RBZ), its governor John Mangudya, Mnangagwa and Attorney General Prince Machaya as respondents.

LSZ executive secretary Edward Mapara, said Mnangagwa, through the Presidential Powers (Temporary Measures) Amendment of the Reserve Bank of Zimbabwe Act, had effectively converted the organisation's United States dollar balances into RTGS at one-to-one, which resulted in it incurring huge losses.

"In February 2009, the Zimbabwe government introduced the multi-currency system in terms of which the United States dollar was accepted as legal tender in Zimbabwe alongside other currencies. The introduction of the multi-currency system was regularised and given legal effect by way of Section 17 of the Finance (No. 2) Act, 2009.

"Consequent to the introduction of the United States dollar, Zimbabwean citizens, including the applicant, were allowed to open and operate United States dollar accounts for purposes of transacting in such currency," Mapara argued.

He said the LSZ went on to open a number of foreign currency accounts with different banks and began transacting in United States dollars.

"During the multi-currency era, the Zimbabwe dollar was demonetised and therefore ceased to be money. This was done by way of policy pronouncements made by the second and third respondents in 2015," he said.

He said the government, however, went on to introduce bond notes in 2015, before Mangudya in 2018 directed banks to separate the Nostro FCA accounts and RTGS FCA accounts.

"In its policy statement issued on the loth of February 2019, the second respondent (RBZ) accepted that the United States dollar was no longer equal to what it called RTGS denominated money.

"The second respondent also advised that the balances sitting in the RTGS FCA accounts were for practical purposes no longer United States dollars but a different currency called RTGS dollar, which was no longer at par with the United States dollar," Mapara said.

Source - dailynews