RBZ ring-fences forex auction system

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Mugove Tafirenyika 



THE Reserve Bank of Zimbabwe (RBZ) has moved to refine and sustain the Foreign Exchange Auction System through a raft of resolutions, including removal of the compulsory requirement to liquidate all unutilised export proceeds after 60 days. 

The auction, introduced in June 2020, is credited for the stability that the economy is enjoying that has seen some kind of permanence in prices of basic goods and services in the last five months or so.

The often volatile black market rate has also been stable in the same period, affording hard-pressed Zimbabweans some economic relief.

Following a meeting of the RBZ Monetary Policy Committee (MPC) yesterday, the central bank resolved to increase the export surrender requirement from 30 percent to 40 percent on all export receipts, with immediate effect.

In a statement yesterday, RBZ governor John Mangudya said the fiscal authorities had also resolved to maintain the liquidation requirement for domestic foreign exchange sales at 20 percent net of sales tax, while authorised dealers are now required to remit funds to the central bank in the currency of receipt.

“The MPC resolved to ensure that the allotment of foreign currency on the foreign exchange auction and the interbank market continues to be guided by the priority list which places productive imports such as raw materials, consumables and capital goods ahead of foreign exchange requirements for services, education and portfolio investment,” Mangudya said.

Mangudya also said the MPC emphasised that all bureaux de change foreign exchange transactions shall be done through the bank’s Bureau de Change Transaction Reporting System.

“The bank will continue to review and refine measures to enhance the sustainability of the foreign exchange auction system, which has been critical in anchoring the management of foreign currency and price and financial system stability in Zimbabwe,” said Mangudya.

The RBZ chief also said the MPC had also made other resolutions to enhance the role of bureaux de change including reduction of the portion of balances to be sold on the foreign exchange auction by bureaux de change from 80 percent to 40 percent in line with the export surrender requirement for exporters.

“The committee also resolved to increase the maximum allowable margin on small transactions to be charged by bureaux de change from five percent to eight percent; to revise the daily maximum limit per transaction to US$2 000 at bureaux de change level to cater for foreign exchange requirements for individuals, micro and small to medium enterprises in accordance with the foreign currency priority list and to affirm that bureaux de change are allowed to purchase foreign currency from individuals and companies without limit subject to the Know Your Customer (KYC) principles and anti-money laundering requirements,” he said.

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