'Bureaux de-change to bridge forex needs'

THE Reserve Bank of Zimbabwe (RBZ) has approved the selling of foreign currency to registered bureaux de-change operators for on-selling to their clients as part of measures to increase formal access to hard currency by small businesses and individuals.

While the Apex Bank operates a weekly Foreign Currency Auction System to cater for the needs of established corporates and registered small to medium enterprises, concerns have been raised that the priority list modelling for bids excludes micro-small businesses and individuals who also need forex.

Economic analysts have argued that the exclusion of this business segment was driving parallel market foreign currency exchange activities, which have an effect of distorting the local dollar value. Under the new system, which came into effect yesterday, RBZ said bureau de change operators will only be able to support payments up to a maximum of US$500.

"Pursuant to the resolution of the Monetary Policy Committee directing bureaux de changes to actively participate in the foreign exchange market to meet the foreign currency needs of small-scale enterprises and individuals, the bank shall with effect from 21 April 2021, sell foreign currency to registered bureau de change for on-selling to their customers," RBZ Governor Dr John Mangudya, said in a statement yesterday.

He said participating bureaux de change operators must comply with the agreed terms of engagement, which include supporting small transactions of up to a maximum of US$500 per transaction.

"All transactions by participating bureaux de change will be monitored through the bureau de change transaction reporting system put in place by the bank," said Dr Mangudya.

"This arrangement is expected to improve the efficacy of the foreign exchange marketing in the country and enhance accessibility of foreign currency by small scale enterprises and individuals through formal channels."

While bureau de changes are already licensed to buy and sell foreign currency, they have struggled to find people willing to sell their foreign currency to them due to the relatively lower official exchange rate which they are obliged to use as opposed to the parallel market rate.

The official rate has maintained stability for several months thereby helping the country tame price escalation. However, the disparity in the exchange rate between formal and informal dealers has seen the public choosing to transact outside the formal banking system where there are higher returns, rendering bureau de changes useless.