HomeBusiness DigestOverreaching impact of Zimbabwe's new forex laws

Overreaching impact of Zimbabwe’s new forex laws

Forex trading in Zimbabwe

While there are still many questions on the legalities of trading in various parts of the world, Zimbabwe is one of the countries that has embraced the evident global interest in forex trading. Much like in other parts of the world, forex trading in the country is indeed legal, as stipulated by the Securities and Exchange Commission (SEC). Moreover, forex traders in Zimbabwe are required to pay tax on their trading profits. Writings on the matter as at 2021 claim that there are approximately 15 000 active traders in the country, however, there are suggestions of an estimated 45 000 unlicensed traders in Zimbabwe. This makes the country one of the African continent’s fastest-growing informal online forex trade locations.

Despite this, there are certain guidelines that legitimate traders in the country do adhere to; other than the tax implications of trading, one must be 18 years or older to be active on the world’s largest financial market. Those who are active traders in Zimbabwe advise trading between 09:00 and 12:00 pm Central African Time (CAT), which they believe is the best time to be actively trading. Moreover, the most popularly traded forex currency pair in the country is the GBP/USD, which does not come as a surprise. Trading US Dollars in America, or in any other part of the world, is generally recommended because of the strength and stability of the USD, which forms part of the major currency couples.

New forex laws

In early 2021, the Zimbabwean government introduced various regulations on the use of forex, which has faced much backlash and resulted in some people calling for them to be scrapped. These regulations have had an impact on many people and businesses, but remain a way of trying to control foreign currency supply in the country. This is expected as more and more countries are realising the need to establish guidelines because of the growing interest in forex in various parts of the world.

For businesses, they run the risk of being fined for only accepting forex for goods and services, instead of Zimbabwean Dollars after the applicable exchange rate. Moreover, banks can be fined if any of their clients are found to have used false information to apply for forex, as such institutions are meant to thoroughly verify and confirm the information submitted. On a personal level, it is reported that individuals are not permitted to keep foreign currencies; anyone who receives foreign currencies has to sell them within 30 days to avoid consequences.

Forex traders have been cautioned against transacting with anyone who claims to be a nationally regulated broker, as there are currently no regulated forex brokers in Zimbabwe, according to reports. This means that those who are trading are doing so through globally regulated online brokers, while being mindful of not contravening any of the new forex laws. Due to the fact that the growing popularity of forex trading in the country has also seen opportunists and scammers come to the fore, particularly those claiming to be regulated brokers in the country, forex traders are being advised to do the necessary research on trading platforms, the applicable taxes, how to stay within the country’s guidelines while trading, as well as educate themselves on best practices to reap the desired rewards.

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