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Cash barons feel the heat

27 Jan 2020 at 19:27hrs | Views
THE government has unveiled new steps aimed at thwarting cash barons who are causing chaos in the economy by fuelling the foreign currency black market.

The punitive measures include seizing the assets of these economic saboteurs and closing their bank accounts.

This comes as the Zimbabwe dollar continues to lose its value against the United States dollar, which last week crashed to 25 against the coveted greenback.

Speaking in an interview with the Daily News at the weekend, the deputy minister of Finance, Clemence Chiduwa, said the government had already started implementing the drastic new measures, to bring sanity to the money market.

"The movement of funds is mainly happening through mobile money platforms, Zipit and RTGS.

"Through these platforms, the Financial Intelligence Unit (FIU) is able to see who is doing what.

"Banks should apply the know-your-customer rule so that we don't sanitise proceeds of money laundering and illegal currency trading," Chiduwa said.
"Stern measures are being taken against institutions and individuals involved in these activities.

"This will involve the freezing of accounts, asset forfeiture and the cancellation of licenses, among other remedies.
"So, as long as banking platforms are being abused for currency manipulation and illegal activities, we are in a position to bring all culprits to book," Chiduwa added.

On Friday, the Reserve Bank of Zimbabwe (RBZ) froze bank accounts of a Chinese company China Nanchang — after it allegedly injected millions of Zimbabwe dollars into the black market.

This allegedly led to the crashing of the Zimbabwe dollar to 1:25 against the US dollar on the parallel market.
Chiduwa also said Zimbabweans needed to understand that there was no quick fix for the country's economic problems.

"What is needed is more production and exports ... This entails the government and the private sector working together for the benefit of our country.

"This is the time to defend our currency and it's everyone's responsibility to bring back the much-needed confidence in our systems for the country to move forward.

"A stable currency allows all of us to plan. The exchange rate indexation in the local pricing of goods has resulted in businesses pricing themselves out of business.

"Customers have reached a stage where they only buy basics and it's high time our businesses should review their pricing models ... Businesses grow based on volumes and small margins," Chiduwa further told the Daily News.

In June last year, the government stunned the market when it abruptly brought to an end the multiple currency system which had stabilised the country for a decade — after the government of the late president Robert Mugabe ditched the worthless local dollar in 2009 after it was decimated by hyper-inflation.

The staggering move was done without backing the re-introduced Zimbabwe dollar — which has now lost more than 65 percent of its value against the US dollar since it came back.

And despite banning the general use of foreign currencies in the country, many shops, markets, restaurants, fast food outlets and indeed many government departments are still demanding payment in US dollars.

This comes amid growing calls for the government to once again sanction the general use of the United States dollar in the country — which saved the economy from total implosion a decade ago.

It also comes as the Zimbabwe dollar continues to plunge, with disastrous consequences on the prices of basic goods.
However, the government has vowed to "never return" to the general use of multiple currencies.

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Source - dailynews
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