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US$ revenues for own use: RBZ

by Staff reporter
01 Apr 2020 at 07:29hrs | Views
Corporates receiving free funds from domestic transactions are allowed to use the funds for their own use either for foreign or for domestic payments, the Reserve Bank of Zimbabwe has said.

Government through Statutory Instrument 85 of 2020 legalised the use of foreign currency for domestic transactions at a fixed exchange rate of 25 local dollars for every US dollar. At the time, the RBZ said the intervention took into account "the country's limited access to foreign finance, which is adversely affecting the country's balance of payments position."

On Tuesday, the central bank issued Exchange Control Circular No. 3 of 2020 which outlines the treatment of proceeds from domestic transactions by corporates.

"In line with these new arrangements, corporates receiving free funds from domestic transactions, will be required to deposit such funds in Nostro (Domestic) FCAs for own use, either for foreign or for domestic payments. This means that inter-FCA transactions have been enabled to facilitate these payments. These domestic transactions by corporates should continue to be done through bank transfers, as well as using plastic money such as Point of Sale (POS) machines," reads the directive signed off by the RBZ's director of Exchange Control Farai Masendu.

He encouraged banks to ensure that their infrastructure and systems are equipped and configured to handle the new payment arrangements and further promote electronic payments so as to minimise the handling of cash and foster social distancing. Meanwhile, the central bank has suspended until further notice the requirement that compelled exporters to liquidate unutilised foreign currency balances within 30 days.

"All exporters shall, therefore, be treated as 'green flagged' for the smooth administration of all export receipts until further notice," reads the circular.

Further, the flagging of importers and penalty system has also been suspended until further notice. However, authorised dealers are required to continue to submit Exchange Control returns in the usual manner and prescribed formats, said Mr Masendu.

Source - the herald