Zimbabwe has announced it will impose penalties on individuals and businesses that do not use the prevailing official foreign-exchange rate of its new ZiG currency for transactions.

The country’s Finance Minister Mthuli Ncube announced in a statement published on Thursday that the government will impose a fine of 200,000 ZiG ($14,782) on firms and individuals found not using the prevailing official foreign-exchange rate of the new ZiG currency for transactions. 

Earlier in the week, the Treasury Chief had warned of impending regulations to enforce the sole use of the official exchange rate in the economy, which is set daily by the Reserve Bank of Zimbabwe, Bloomberg reports.

In an effort to curb the parallel market, the government has designated the official ZiG exchange rate as the sole reference for currency trading.

The new rule also eliminates a previous requirement for retailers to price their goods within 10% of the official exchange rate for profit margins. This regulation made them uncompetitive against informal traders in the competition for Dollars, as their goods became more expensive. 

The ZiG, short for Zimbabwe Gold, was introduced on 5th April, replacing the Zimbabwean Dollar, which had lost 80% of its value this year. 

This new currency marks the sixth attempt by the southern African nation to establish a functional local currency. It is backed by 2.5 tons of gold and approximately $100 million in foreign currency reserves held by the central bank.

Banknotes and coins of the ZiG were issued to the public at the end of April.

According to data on the central bank's website, the ZiG was trading at 13.53 to the Dollar on Thursday. However, it dropped to a record low of 13.67 to the Dollar on Monday, the lowest since its introduction a month ago.

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