THE Reserve Bank of Zimbabwe (RBZ) has ordered all corporates receiving foreign currency, to deposit the money into their domestic nostro bank accounts.
BY TATIRA ZWINOIRA
Last week, the RBZ lifted the ban on the use of the greenback to help mitigate against COVID-19 (coronavirus) shocks, effectively starting the redollarisation process. The move came at a time Treasury and RBZ coffers were reportedly running dry of the foreign currency while the Zimbabwe dollar (ZWL) continues to devalue.
“Corporates receiving free funds from domestic transactions, will be required to deposit such funds in nostro (domestic) FCAs for own use, either for foreign or for domestic payments. This means that inter-FCA transactions have been enabled to facilitate these payments,” said RBZ exchange control director Farai Masendu, in the new RBZ Exchange Control Circular No.3 of 2020.
“These domestic transactions by corporates should continue to be done through bank transfers, as well as using plastic money such as point of sale machines. In light of the above, banks and payment providers are encouraged to ensure that their infrastructure and systems are equipped and configured to handle the new payment arrangements and further promote electronic payments so as to minimize the handling of cash and foster social distancing.”
He reiterated that individuals could pay for goods or services chargeable in Zimbabwe dollars in foreign currency using free funds based on the ruling exchange rate of the day.
In February last year, the RBZ established the interbank market to allow for official trading in foreign currency.
However, the interbank market has since failed dismally with the Zimbabwe National Chamber of Commerce and Confederation of Zimbabwe Industries confirming that trading on the platform was non-existent.
This was due to foreign currency holders refusing to bring their money to the platform out of mistrust in the monetary authorities who have been accused of rampant corruption.
The move of bringing back the greenback comes as the central bank has in the past estimated that there is US$2 billion circulating in the informal market.
Apart from ordering corporates to deposit their foreign currency earnings into domestic nostro accounts, the RBZ suspended the 30-day liquidation requirement on unutilised foreign currency balances for exporters until further notice.
“All exporters shall, therefore, be treated as “green flagged” for the smooth administration of all export receipts until further notice. The flagging of importers and the penalty system has also been suspended until further notice,” Masendu said.
All payments processed during the ongoing lockdown shall continue to be reported to the computerised exchange control batch application system and all supporting documentation should be filed separately for onsite inspection after the lockdown period.
“Authorised dealeros shall continue to process applications for extensions of acquittal period, cancellations, amendments and exceptional acquittal of foreign payments in line with the existing exchange control framework,” Masendu said.
He added that authorised dealers would continue to submit exchange control returns in the usual manner and prescribed formats.