RBZ sets up foreign exchange management committee

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THE central bank has set up a foreign exchange management committee to consult with the banking sector to review bank import receipts and discuss ways to limit those imports to just the essentials.

BY TATIRA ZWINOIRA

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The new committee will meet on a weekly basis with the Reserve Bank of Zimbabwe (RBZ), as it moves to aggressively improve on exports and liquidity in the economy.

Speaking at an Industry and Commerce ministry breakfast meeting on the Import Management and Local Industry Support Measures on Friday in Harare, RBZ deputy governor Kupukile Mlambo said the new monetary measures were to tackle the cash shortages and close the externalisation of funds.

“We announced new monetary measures and these measures were designed to tackle the main challenges. The first challenge was the cash shortage and with that one we did three things. Firstly, impose withdrawal limits on the automated teller machines, secondly, we tried to close the externalisation of cash in this country and finally we tried to de-concentrate the focus on the United States dollar,” Mlambo said.

“We have set up a foreign exchange management committee that is going to meet every week, a meeting between the reserve bank and the bankers to see how they are financing the imports. We want to make sure that we allow most essential imports for the time being.”
The consultations between the central bank and bankers come after transactions in United States dollars have risen to an all-time high of 98% in Zimbabwe.

This has led to a strain on the United States dollar usage and created a demand that could not be met, leading to the economy’s on-going cash shortage. As a result, RBZ has introduced a host of measures, namely, a 5% incentive to exporters export revenue, bond notes to supply hard cash onto the market, and limit daily withdrawals to a maximum $300.

The incentives and bond notes will be backed by a $200 million African Export-Import Bank backed facility.

RBZ’s strategy is to incentivise exporters to increase exports and limit imports as much as possible.

5 COMMENTS

  1. What about:
    1. Encouraging the use of plastic (more swipe points)
    2. Reducing the cost of swiping ones card
    3. Making banks reduce the cost of having a bank card (charges for getting a bank card scraped)
    4. Tax incentives on locally produced products to encourage them into the market
    5. Taxing (not buy a lot, but enough to make local products competitive in price) some imported products to make them slightly more expensive than some local products to encourage us to purchase them.
    6. Encouraging/forcing banks to reduce the service charges charged for having an account and making interest rates more than a word that is used in other parts of the world.

    I am no economist, but are these not practical solutions as opposed to running and using $200million USD of real money to print a fake note that can’t be used anywhere else other than here in Zimbabwe?

  2. Also Not An Economist

    What about:
    1) Renewed leadership in ZPF to begin to restore confidence
    2) Dealing with rampant greed and corruption in government
    3) All stakeholders input into the problem: HONESTY, TRUTH AND INTEGRITY
    4) De politisising Zimbabwe
    5) A truth and reconciliation drive to bring accountability and healing
    6) REPENTANCE

    Laying all the responsibility on the banks and indirectly onto the general population is a short term solution only. We need to lay the axe to the root of the problem!

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