Zim banks start opening yen, yuan accounts

SOME local banks have started opening accounts for transacting in the Japanese yen, Chinese yuan, Australian dollar and Indian rupee following the expansion of the country's foreign currency basket by the Reserve Bank.

The central bank said the introduction of additional currencies was necessitated by improved trade and investment ties between Zimbabwe and Asian economies - China, India, Japan and Australia.

Zimbabwe adopted a multi-currency regime on January 2009 in the wake of the sanctions-induced collapse of the Zimdollar. And of the four currencies adopted - the South African rand, the Botswana pula, the British pound sterling and the US dollar - it is the greenback that has become the main medium of exchange.

A snap survey conducted by The Herald Business has shown that most banks were already accepting clients intending to open yuan, rupee, Australian dollar and Japanese yen accounts.

Some banks were yet to start opening accounts in the additional currencies but said that could begin soon.

The requirements for opening accounts are similar to those when opening accounts under existing currencies. The 2014 Monetary Policy Statement presented late January underscored the importance of facilitating business growth between Zimbabwe and the four nations among others.

FBC Holdings group chief executive Mr John Mushayavanhu said although the transactions in the additional currencies were still low as the transacting public was still used to doing business especially in the US dollar, signs were that business would pick with time.

"We have already started. If anyone wants to transact in the Chinese yuan, Japanese yen or Australian dollar, we are ready for them," said Mr Mushayavanhu.

The opening of accounts especially in Chinese yuan is likely to improve trade between local and Chinese businesses as it reduces the risk associated with exchange losses.