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RBZ statement on the Interbank Foreign Exchange market

by RBZ
24 Jun 2019 at 17:29hrs | Views
Further to the Statutory Instrument 142 of 2019 issued by the Hon. Minister of Finance and Economic Development Prof Mthuli Ncube on the removal of the multi-currency system in Zimbabwe and replacing it with a local unit of account for transacting purposes, the Reserve Bank of Zimbabwe wishes to announce that it will implement the following measures:

a)    Direct banks to transfer to the Reserve Bank the RTG$S/ZWL$$s that they are holding as counterpart funds for the foreign currency historical or legacy debt that  Government through the Reserve Bank   is assuming at the rate of 1:1 between the RTGS$ and the US$. This measure is expected to mop around ZLW$1.2 billion from the market by end of the week.

b)    Adjust the interest rate on the Reserve Bank overnight  window upwards from the current 15% per annum to 50% per annum  in line with inflation trends.

c)    Remove administrative limits on the operation of Bureaux de change and on the cap on margins for banks for interbank foreign exchange transactions.

d)    Put a vesting period of 90 days on disposal of dual listed securities or shares purchased by investors on the Zimbabwe Stock Exchange.

e)    Increase supply of foreign currency into interbank foreign market by ensuring that at least 50% of the surrender portion of foreign currency is sold to the interbank market. This will be supplemented by the use of LCs for the importation of essential commodities  that include fuel, cooking oil and wheat. The bank has put in place LCs amounting to US$30 million for this purpose.

Source - RBZ