RBZ moves on foreign payments delays

The Reserve Bank of Zimbabwe (RBZ) says a $70 million nostro stabilisation facility would be disbursed at the end of the month, to deal with current delays in foreign payments, among a raft of measures to stabilise the economy.


In his monetary policy statement released yesterday, RBZ governor, John Mangudya said the stabilisation facility would “augment the foreign exchange resources in the banks’ nostro accounts, whilst awaiting the opening of the tobacco and cotton selling season”.

“Whilst the country has $250 million in the nostro accounts and $120 million in physical cash at banks, the bank, using the model, estimates that there is around $600 million circulating in the economy,” he said.

“The main reason behind the substantial amount of cash circulating in the economy includes the treatment of foreign currency as a store of value, low business sentiment or confidence within the economy, high informalisation and financial exclusion.”

The facility comes at a time companies have been struggling to make foreign currency payments for raw materials due to the depletion of the nostro accounts.

Mangudya directed banks to reduce lending rates to not more than 12% per annum with effect from April 1 to support the productive sectors of the economy.

“… all banking institutions are required to ensure that lending interest rates should not exceed 12% per annum and that bank charges that include application fees, facility fees and administration fee, should not exceed 3%,” he said.

Mangudya directed banks to submit, by the end of the month, a detailed report indicating their current level of charges for account maintenance and ledger fees as at December 31, 2016, adding that the apex bank would continue to monitor bank charges to ensure access to affordable banking services and at the same time promote the use of plastic money.

He prescribed that all banks have to review interest paid on deposits and to submit a report to the RBZ detailing their deposit profiles and proposed interest rates on deposits to promote a savings culture. This has to be done by March 31.

The central bank chief implored RBZ to preserve foreign exchange in nostro accounts by enforcing market and institutional discipline and domesticating the settlement of local card transactions on international card switches.

The measure, Mangudya said, has been necessitated by the need to ensure that nostro accounts are used for foreign payments and that domestic transactions are settled locally through platforms such as RTGS, ZimSwitch, Visa, MasterCard, local mobile banking and/or cash and bond notes.

“Utilising nostro accounts to settle domestic transactions put unnecessary pressure on the country’s foreign exchange reserves that should ideally be used for international or offshore payments,” he said adding that $206, million for card and DStv transactions paid through the nostro accounts between July-December 2016.

“Spending more foreign exchange on DStv subscriptions than on raw materials to produce cooking oil, for example, is not only counterproductive but also illogical,” he said.

Mangudya said his measures were necessary as “the country needs to pursue a new economic development model that is anchored on an export- led growth strategy to balance exports and imports, while simultaneously addressing the structural rigidities besetting the economy in order to expand output”.

6 Responses to RBZ moves on foreign payments delays

  1. T-one February 16, 2017 at 7:15 am #

    someone please explain what all this means especially on the DSTV If i loose my DSTV i might die of stress. i come home to DSTV to destress from the Mangudya economics.

  2. n mutodi February 16, 2017 at 10:45 am #

    Anopenga uyo he should admit kuti vatadza kudriver nyika

    • cde dm February 16, 2017 at 11:35 am #

      they recently frustrated and turned down Masiiwa’s kwese TV from launching in his native country. nhasi vaakuhumana. Shame

  3. Tatenda February 16, 2017 at 11:56 am #

    Oh, so we are now blaming DSTV for the Mugabe’s mismanagement???

  4. Zvogwadza February 16, 2017 at 12:28 pm #

    Go and rest Mr Governor. Do you or do you not have DSTV in your own house and office? How did you pay for the subscriptions? Instead of finding where our USD15bn went and why one woman should buy a ring for USD1,4m you’re busy here humanaring. Those subcriptions are being paid from the people’s hard earned monies you troglodytes.

  5. Randall Flagg February 17, 2017 at 2:04 pm #

    So this idiot wants to take people’s right of watching DStv because they ruined the economy? They shouldn’t stick their noses in people’s right of choice. He’s just going for easy targets and ignoring the real people who are depleting foreign currency in this country. This government really know how to irritate the living hell out of people.

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