HARARE, April 24 (Xinhua) -- Zimbabwe's Vice President Constantino Chiwenga said on Wednesday that the government will descend heavily on drivers of the foreign currency parallel market.
Addressing the 2019 Zimbabwe International Trade Fair business conference in the second largest city of Bulawayo, Chiwenga said the parallel market, which he likened to "financial terrorism," was the main driver of price distortions which were causing untold suffering to the ordinary people.
He said the government was not only aiming to improve the ease of doing business to attract investment and for local businesses to prosper, but was also targeting to ensure inflation remained manageable to allow the economy to function properly.
"These noble objectives will however not be attained if as individuals and corporates, we continue to sustain the parallel market in competition with the formal market by engaging in its underground activities," the state run news agency New Ziana quoted him as saying.
"We would want to make this warning. Those who are undertaking these activities, we already know and if one tries to fight and practice financial terrorism on Zimbabweans, we will react appropriately and no one should cry that he has not been treated fairly."
Chiwenga said the government had responded positively to requests by the business community to establish an interbank foreign exchange market, which became operational this February, but some were busy sabotaging it.
Introduction of the interbank foreign exchange market saw the government discarding the fixed 1:1 exchange rate of the Bond note against the United States dollar.
While now officially trading at 3:21 to the U.S. dollar on the black market, the exchange rate is 1:4.61 bond notes.
The vice president vowed the formal exchange rate would work even as some were working to sabotage it.
"The parallel market continues to overshadow the formal market because there are buyers and sellers who continue to partake in its activities," he said.
"As responsible and patriotic citizens we should ask ourselves whether our activities are in the best long-term interests of the nation."
Meanwhile, the vice president slammed profiteering and unjustified increases of prices of goods by local businesses.
"The recent and continuing spate of price increases cannot be explained by objective cost push factors but is driven by speculation originating from the parallel market," he said.
"Let's behave in a way that will see us building Zimbabwe to be the country we all want. Rising inflation hurts the whole economy and its development prospects, negatively affecting all of us," he said.
