In the wake of widespread public anger and chaos resulting from the introduction of Statutory Instrument 127 of 2021, the RBZ has been forced to delay the implementation of the new law. The reprieve which came in the dead of night in a tweet at 11:00 PM yesterday sought to explain the need for the new law as well as give businesses like OK supermarket whose systems have to be updated to comply with the new law the time to do so.
Some points to note on S.I 127 of 2021: The purpose of the S.I is to ensure that those obtaining foreign exchange from the auction system do not use parallel market rates.
The use of parallel exchange rates of above 100, for example, on funds obtained from the auction at ZW$85 to US$1 is not good for the economy and consumers. It is these anomalies or arbitrage opportunities that the S.I is designed to deal with.
The S.I is not designed to harm business but to provide a level playing field for business and to protect consumers.
The use of foreign currency for the payment of goods and services is still allowed as per SI 85 of 2020.
Businesses have been given 2 weeks to regularise their systems so that they can comply with the SI on the receipting of goods and services in either foreign currency or local currency. The S.I is an essential means of enforcing compliance which is necessary for continued stability.The statement issued by the RBZ on Twitter.
There was so much chaos and widespread confusion in the wake of Statutory Instrument 127 of 2021. Because the RBZ and the government insist on secretly crafting and unleashing laws without consulting anyone. Most businesses including giant retail chains like OK, TM Pick N Pay, Food World, Colcom Foods, Texas Meats and many other household businesses were caught unawares. The tough-sounding law was so sudden a lot of businesses were stunned and didn’t know how to comply.
A lot of businesses had been offering discounts on USD payments because, despite the official rate remaining the same, rates on the parallel market had continued to rise. SI 127 of 2021 outlaws the use of these discounts and also demands that everyone uses the official rate. To prevent losses, as businesses are also compelled to receive ZWL prices, most companies simply either raised their USD prices or in the case of OK supermarkets simply started refusing USD and other foreign currency altogether.
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