Wholesalers Reject Zimbabwe Dollar

2ย years agoFri, 24 Jun 2022 08:46:30 GMT
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Wholesalers Reject Zimbabwe Dollar

Some wholesalers in the country are reportedly no longer accepting the Zimbabwe dollar and insisting on payments in foreign currencies only.

The local currency is shedding value on a weekly basis on both official and unofficial markets.

This week, the Zimbabwe dollar is officially trading at ZWL$350 against the US Dollar while on the parallel market the exchange rate is above ZWL$600.

Speaking in the National Assembly on Wednesday, Rushinga legislator, Tendai Nyabani (ZANU PF), said:

We have wholesales like National Foods, Gains and others; we have noted that these companies are receiving money from the RBZ (Reserve Bank of Zimbabwe) so that they assist people but I have noted that they are not taking RTGs and local currency but they only want US dollars.

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We have noted that people have to go to the black market to procure US dollars so that they go and buy from these wholesalers.

In his response Finance and Economic Development deputy minister, Clemence Chiduwa said they have also received similar reports. Said Chiduwa:

Indeed, it is very true that we are receiving reports regarding wholesalers and such business entities which come to the auction.

They get money to buy their goods. Such business entities, upon receiving money from the RBZ, then sell their goods in US dollars and do not take local currency.

Working together with the Financial Intelligence Unit, our Ministry has been seized with the issue.

As of Friday last week, we investigated big shops, pharmacies, and some retailers. Out of the 28, those who were complying with the exchange rate were only 11, which means that we have a lot of violations.

The FIU on its own does not have the capacity to cover Zimbabwe as a whole. At the moment, we want to work with the National Economic Inspectorate and different law enforcement agents so that we cover the whole country.

Meanwhile, former Finance Minister, Tendai Biti urged the Government to abandon the auction system, saying it has become a source of arbitrage. Said Biti:

The black market rate is now between ZWL$650 andZWL$700 but the auction is around ZWL$350.

Why not just remove the auction so that we do not have arbitrage and the ZWD will find its own resting place without the arbitrage of the auction.

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