Zim bans 'unlawful hoarding'
2008-03-03 17:38
Special Report
A classical music presenter for the BBC has been arrested and is in custody in Zimbabwe.
Harare - Zimbabwean President Robert Mugabe's government has made it illegal to possess more than Zim$500m in cash, it emerged Monday -the equivalent of 21 US dollars.
According to a new regulation published last month, anyone found with more than Zim$500m in cash will be guilty of "unlawful hoarding".
Officially Zim$500m is worth around US$16 000. But it equates to only around US$21 on the dominant parallel market rates for foreign exchange.
It is also illegal for companies to settle any bills for more than US$250m (just over US$10) in cash. That means it is now technically illegal for traders to pay for 10 litres of fuel in cash.
The new regulation has been published under the Bank Use Promotion and Suppression of Money Laundering Act.
The authorities want to maintain a tight grip on the cash in circulation. Central bank governor Gideon Gono last December blamed what he called "cash barons" for creating cash shortages and pushing up annual inflation, now more than 100 000%.
The authorities want to encourage use of cheques and cards. But power cuts mean it?s often impossible to settle bills by electronic transfer of funds.
Many schools and supermarkets do not want bills settled by cheque because of roaring inflation rates. In the five or so days cheques take to clear, traders stand to lose a significant amount of money.
Sapa-dpa
- SAPA