RESERVE bank of Zimbabwe (RBZ) is negotiating for more nostro stabilisation facilities with the Afreximbank, as it makes strides to avert a dry foreign exchange spell after the tobacco selling season.
By Fidelity Mhlanga
Nostro accounts stability is a precondition for foreign payments which is essential for the importation of key commodities such as fuel, raw materials and cash.
RBZ governor John Mangudya told NewsDay last week that the apex bank will negotiate for facilities with the Afreximbank to ensure perpetual nostro accounts stability.
“We are negotiating for higher facilities for Zimbabwe such that we restructure and enhance most of the facilities. We want to ensure that there is enough foreign exchange in Zimbabwe after the tobacco season, as you know there is always a gap after the end of the tobacco selling season. During that period so we want to make sure we mobilise that foreign finance. You know we use foreign currency for our domestic market and yet we don’t have much access to foreign currency,” he said.
In April, the central bank made a $100 million drawdown from the $150 million provided by the Afreximbank anchored on tobacco earnings.
This came after tobacco merchants mobilised in excess of $700 million this season.
Mangudya said the bank could use platinum or diamonds as security for the facility.
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“We are negotiating for more facilities to ensure that Zimbabwe has more foreign currency after tobacco. Whether it’s gold, a facility is a facility. Otherwise it does not matter whether we are using platinum or diamond or tobacco. The whole idea is that we are negotiating for higher facilities to ensure that Zimbabwe has sufficient foreign currency,” he said.
Tobacco and minerals account for 75% of the country’s export earnings.
Yesterday, RBZ deputy governor, Kupukile Mlambo told delegates at the Audit Committee forum organised by KPMG that the foreign currency backlog was at $185 million by end of April.
“We see this in the backlog in foreign currency payment. As of end of April our backlog was at $185 million, but more importantly we have seen an emergence of a premium on foreign currency,” he said.
Mlambo said Zimbabwe RTGS balances were not matched with nostro balances mainly driven by trade deficit.
As of April 80% of the unsettled transactions covered products at the top of the import priority list.
RBZ is taking steps towards clearing foreign payments backlog by year-end, banking on the expected bumper grain harvest, which will substitute the importation of maize this year.