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Zimbabwe to crack down on offshore cash hording

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(Globalpost/GlobalPost)

Zimbabwe's central bank on Monday warned it would go after local businesses stashing foreign currency in offshore accounts as it seeks to claw back much-needed revenue.

The Reserve Bank expressed "great concern" that some exporters were "unnecessarily keeping export proceeds offshore," Morris Mpofu, a senior bank official said.

"This has resulted in a staggering overdue amount of $360 million as at 4 February 2013," said Mpofu adding that the practice "contributed to the prevailing liquidity crunch in the market."

Mpofu said failing to remit export proceeds within 90 days as required by central bank rules was "a serious violation of exchange control regulations."

The bank did not cite the offending companies but warned traders, tourism operators and cross border transport operators it would launch a probe to bring "culprits to book".

The central bank last month said Zimbabwe's economy remains fragile with low export earnings, lack of credit lines and foreign direct investment resulting in the liquidity crunch.

Zimbabwe is still suffering the effects of a nearly decade-long economic downturn in which companies closed or downsized while cash and basic goods were in short supply.

The situation was worsened by hyper-inflation which hit 231 million percent three years ago, the rate has now stabilised at 2.9 percent.

Last month Finance Minister Tendai Biti announced that the country's public accounts balance stood at $217, after the payment of public workers' salaries.

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http://www.globalpost.com/dispatch/news/afp/130211/zimbabwe-crack-down-offshore-cash-hording