THE runaway black market, which had thrived in the
just-ended multi-currency system, was all but pacified yesterday in response to
Government’s measures to contain fiscal and monetary problems in the country.
There was subdued activity on the street and among foreign
currency dealers as they reeled from Monday’s sea-change measures that
Government introduced via Statutory Instrument 142 of 2019.
And yesterday, the Reserve Bank of Zimbabwe (RBZ) announced
a raft of measures to tame the parallel market, including the scrapping of
unconditional authorisation for foreign currency withdrawals by companies.
The measures from RBZ’s Exchange Control Division were
issued in terms of Section 35 (1) of the Exchange Control Regulations Statutory
Instrument 109 of 1996.
“Authorised dealers are advised that unconditional
authorisation for foreign currency cash withdrawals by corporates has now been
removed,” reads the notice.
“However, withdrawals by the same on deserving cases such
as road toll fees are now permissible only on a case by case basis subject to
the application of know-your-customer (KYC) and customer due diligence (CDD)
principles on the withdrawer.
“These principles to be applied should be in line with
Anti-Money Laundering and Counter Terrorism (AML/ CFT) regulatory requirements
and best practice.”
Experts say the decision by the RBZ will curb the
proliferation of the parallel market for forex, which was responsible for
runaway prices of basic goods and services as producers and sellers followed
the US dollar parallel market rate.
There was suspicion that some corporates that were selling
their products in forex were withdrawing large sums of money from their Nostro
Foreign Currency Accounts (FCAs) and offloading it on the parallel market.
This saw rates spiking to obnoxious levels, and impacting
negatively on prices of goods and services, leaving disadvantaged members of
society and low-income earners exposed to high costs of living.
Since the proclamation of Statutory Instrument 142 of 2019
by Finance and Economic Development Minister Professor Mthuli Ncube on Monday,
the parallel market rate for forex dropped significantly from a high of about
US$1:RTGS$15 to US$1:RTGS$11 by yesterday.
The measures by the RBZ are expected to result in
significantly lower parallel market forex rates going forward, which will
result in declining prices of goods and services.
Among other measures, the RBZ also reminded authorised
dealers that the limit of export cash in person or baggage remains at US$2 000
per exit as per Exchange Control Directive RS119 of August 4, 2017.
“For individuals, the current policy shall remain in force
with authorised dealers also required to apply the usual KYC and AML/ CFT
standards,” reads the statement. In terms of legacy debts registered with the
central bank in fulfillment of Exchange Control Directive RU28 of February this
year, authorised dealers were directed to transfer all RTGS dollar balances to
the RBZ.
Retention thresholds for export receipts and tobacco and
cotton offshore loan drawdowns remain as previously communicated.
The RBZ also intends to sell 50 percent of the export
retention due to it, to the interbank market to enhance its operations. This
will result in more forex on the interbank and suffocate the parallel market.
Further, to deepen the interbank market and enhance the
operations of the bureaux de change, the bureaux de change are now allowed to
buy and sell forex without limit as from yesterday.
Previously, bureaux de change could only transact up to
US$10 000. To promote trade on the interbank, the RBZ also scrapped the 2,5
percent margin on forex trades with immediate effect.
Small-scale gold producers with Nostro FCAs will not have
their funds subjected to the 30 day retention period so as to encourage them to
deliver more gold to Fidelity Printers and Refiners (RPR), a gold buying arm of
the RBZ.
However, the current gold marketing framework shall
continue to apply. Herald
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