WATCH: RBZ sets foreign currency retention for exporters, bans mobile money agent lines

BY ZBC Reporter

The Reserve Bank of Zimbabwe (RBZ) has with immediate effect allowed exporters to retain 70 per cent of their foreign currency earnings and reviewed the use of hard currency to 60 days, while mobile money agent lines have been banned permanently.

In his 2020 mid-term monetary policy statement released this Friday, RBZ governor Dr John Mangudya said the latest measures are aimed at stabilising financial markets.

An increase in local domestic foreign currency accounts has also resulted in a policy measure whereby traders will liquidate 20 per cent of hard cash after depositing the money in banks.

Dr Mangudya says such a policy will also enable locally generated foreign currency to sustain the auction.

Individuals, embassies, non-governmental organisations, tobacco, cotton producers and domestic FCAs for fuel companies will, however, not be affected.

The RBZ has maintained the bank policy at 35 per cent to remove speculative tendencies, with banks being granted a deadline extension on their recapitalisation plans to 2021.

However, it is the creation of money by mobile platforms which is not backed by real balances that have seen the central bank directing transactions of 5 000 dollars per day.

Mobile money operators have therefore been directed by the central bank to close multiple wallets with all agent lines being abolished with immediate effect.

According to the central bank, retailers and service providers will, however, still maintain merchant wallets.

In his mid-term monetary policy statement, RBZ Governor Dr John Mangudya noted that the introduction of the auction system had ended the volatility of the foreign currency system and its exchange rates and that the auctions had provided over 87 per cent of the foreign currency needs of importers since the auction system was introduced on June 23.

The stability in exchange rates had stabilised prices and brought inflationary trends crashing south. This now had to be sustained, hence the new measures and tweaking of the foreign currency and banking systems. The new policy measures expected to cushion the economy from the negative effects of the Covid-19 pandemic.

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