News / Local
RBZ increases US$ reserves thresholds to 15% to encourage Zimdollar usage
29 Sep 2023 at 01:34hrs | Views
The Reserve Bank of Zimbabwe's Monetary Policy Committee (MPC) has increased the US$ Statutory reserve requirement to 15%, a move that experts suggest aims to encourage the use of the ZWL (Zimbabwean Dollar).
Official data reveals an increasing reliance on the US$, with recent Monetary Policy Statements indicating that foreign currency-denominated loans accounted for 94% of the banking sector's loan portfolios.
In its recent meeting, the RBZ MPC implemented a new policy directive to raise the US$ Statutory Reserves requirements.
RBZ governor John Mangudya stated, "The MPC opted in favor of standardizing the statutory reserve requirements for both foreign and local currency deposits at 15% and for savings and time deposits at 5%."
Statutory reserves refer to the funds that banks deposit with the central bank as a safeguard against uncertainties, typically deposited for every dollar placed by their clients.
Previously, the US$ threshold stood at 10%, while the ZW$ requirement was at 15%.
Market observers believe this initiative is designed to curb the rapid extension of US$ loans by banks and promote the broader use of the ZWL.
The central bank also decided to maintain the bank policy rate at 150% per annum and retain the Medium-Term Accommodation lending facility at 75% per annum.
Mangudya noted, "The MPC was pleased with the strong uptake of Gold Backed Digital Tokens (GBDT) for value preservation purposes, which stood at 332 536 636 milligrams as of September 19, 2023.
"The bank will expedite the phase for transacting in GBDT, styled Zimbabwe Gold (ZiG), as an additional payment method alongside existing payment platforms," he added.
Mangudya emphasized that ZiG will complement the local currency and foreign currency in facilitating domestic transactions more predictably, given the stability of the international gold price. To build confidence in ZiG, an independent certification mechanism will be established to assure the public of the availability and adequacy of the gold backing ZiG.
Official data reveals an increasing reliance on the US$, with recent Monetary Policy Statements indicating that foreign currency-denominated loans accounted for 94% of the banking sector's loan portfolios.
In its recent meeting, the RBZ MPC implemented a new policy directive to raise the US$ Statutory Reserves requirements.
RBZ governor John Mangudya stated, "The MPC opted in favor of standardizing the statutory reserve requirements for both foreign and local currency deposits at 15% and for savings and time deposits at 5%."
Statutory reserves refer to the funds that banks deposit with the central bank as a safeguard against uncertainties, typically deposited for every dollar placed by their clients.
Previously, the US$ threshold stood at 10%, while the ZW$ requirement was at 15%.
Market observers believe this initiative is designed to curb the rapid extension of US$ loans by banks and promote the broader use of the ZWL.
The central bank also decided to maintain the bank policy rate at 150% per annum and retain the Medium-Term Accommodation lending facility at 75% per annum.
Mangudya noted, "The MPC was pleased with the strong uptake of Gold Backed Digital Tokens (GBDT) for value preservation purposes, which stood at 332 536 636 milligrams as of September 19, 2023.
"The bank will expedite the phase for transacting in GBDT, styled Zimbabwe Gold (ZiG), as an additional payment method alongside existing payment platforms," he added.
Mangudya emphasized that ZiG will complement the local currency and foreign currency in facilitating domestic transactions more predictably, given the stability of the international gold price. To build confidence in ZiG, an independent certification mechanism will be established to assure the public of the availability and adequacy of the gold backing ZiG.
Source - NewZimbabwe
