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Exchange liberalisation right step: ICAZ

by Staff reporter
27 Mar 2019 at 23:06hrs | Views
THE liberalisation of the foreign exchange rate by the Reserve Bank of Zimbabwe (RBZ) in this year's Monetary Policy Statement (MPS) has standardised financial reporting and done away with distortions emanating from the previous 1:1 exchange rate, the Institute of Chartered Accountants of Zimbabwe (ICAZ) has said.

Accountants have previously had serious challenges balancing their books and reporting of financials as monetary authorities insisted on a 1:1 exchange rate between the RTGS$ and the US$ despite the obvious and glaring disparity on the ground.

The 1:1 exchange rate was however ditched in RBZ Governor Dr John Mangudya's 2019 MPS whereupon he left the rate determination to the market.

Speaking to journalists on the sidelines of the ICAZ Monetary Policy review in Harare yesterday, ICAZ chief executive officer Gloria Zvaravanhu said the currency liberalisation by the RBZ in the MPS had been a welcome relief for accountants.

"Certainly it (exchange rate floating) has made life easy for accountants in the sense that now, when we look at the exchangeability between what we had previously as nostro accounts and the other FCA accounts, we now have an interbank rate, a market rate that accountants can use to convert," said Mrs Zvaravanhu.

The meeting was also attended by RBZ deputy director for Economic Research Division Dr Nebson Mupunga and ICAZ noted that interactions with the RBZ are key in the process of building confidence and understanding from the market.

Presenting the 2019 MPS, Dr Mangudya noted that the decision to liberalise the foreign currency market was arrived at after consultations from various sectors of the economy. He also noted that the bank had taken note of the liberalisation to various sectors including accounting.

"The bank considered the implications — accounting, financial, economic, legal and social - that are embedded in the establishment of an inter-bank forex market within the context of the current national payment systems made up of RTGS, mobile payment platforms, point of sale (POS), bond notes and coins," he said.

Source - the herald