Mangwana explains SI 127, as market reacts to the statute

Some companies, OK Zimbabwe in particular has reacted to the recently promulgated Statutory Instrument 127 by suspending the acceptance of the United States of America dollar for services rendered.

According to the retail giant, the move is a result of statute, as the company systems are yet to comply with the SI’s requirements.

Meanwhile, Permanent Secretary in the Ministry of Information, Publicity and Broadcasting Service Nick Mangwana explains the purpose of the SI 127.

“The purpose of SI 127 is to ensure that those obtaining forex from the auction system use the market exchange rate, which is within the auction weighted exchange rate or the auction bid range.

“This is to minimise arbitrage on foreign exchange obtained from the auction system,” he says.

He bemoaned the alleged abuse of the forex auction system by some businesses.

“Is it proper for someone to obtain funds from the auction system at 85 to purchase goods, and then sell the goods using the parallel market exchange rate above 100?

“Don’t both the consumers and the market need protection from such?” he queried.

Responding to the move taken by OK Zimbabwe, Mangwana said businesses have been given two weeks to regularise their business operating systems to comply with the Statutory Instrument on the receipting of goods and services in either foreign currency or local currency.

He added that it seems some have gone into compliance straight away.

-Zwnews