News / National
Travellers can now take out US$10 000 cash
02 Mar 2023 at 05:45hrs | Views
THE Reserve Bank of Zimbabwe yesterday doubled the amount of foreign currency in cash someone can physically carry on their person or in their baggage out of the country to US$10 000.
Far larger sums are moved every day out of the country within the formal banking system as importers, those paying dividends, people paying other foreign bills and the like do their normal business, with the cash in wallets being only a very small proportion of the foreign currency that is used to pay for goods, services and travel outside the country.
RBZ Governor Dr John Mangudya announced the new cash limit in a Statutory Instrument made in terms of the Exchange Control Act.
The US$10 000 limit in baggage or pocket can be cash in any foreign currency, gold coins or in any desired combination of foreign currencies or gold coins.
Besides the limit for foreign currency banknotes and gold coins, travellers can also take out the equivalent of US$1 000 at the interbank rate in "demonitised" Zimbabwean notes and coins.
Anyone intending to carry more than US$10 000 in notes and coins, rather than making electronic transfers, requires exchange control approval.
Diplomats are not subject to these limits.
Commenting on the development, economist Dr Prosper Chitambara said it would go a long way in cultivating confidence in the economy.
"It is an improvement from the US$5 000 that was there before and its meant to relax capital controls in terms of export of cash. It's critical in terms of engendering greater levels of confidence within the economy. The more relaxed the control, the greater improvement in confidence in the economy," said Dr Chitambara.
Another economist said it was another step in opening up the economy.
"What is important is to have less controls as much as possible. That is what the RBZ has done and it is quite positive," said the economist.
Harare-based economist Professor Gift Mugano said while the legal instrument would help to remove controls, he expressed reservations on the new limit.
"It does not stimulate economic growth but rather will expedite draining of foreign currency from the country. The net effect of this is a liquidity crunch particularly now since we are now dollarised.
"You are aware that we have a large informal sector and by increasing the amount of money which can be taken out of the country to US$10 000, we have really taken a position to take oxygen out of our system," said Prof Mugano.
"The most important exchange controls which must be dealt with relate to export retention and liberalisation of exchange rate. Increasing foreign currency which can be taken out is merely draining oxygen from our system."
Far larger sums are moved every day out of the country within the formal banking system as importers, those paying dividends, people paying other foreign bills and the like do their normal business, with the cash in wallets being only a very small proportion of the foreign currency that is used to pay for goods, services and travel outside the country.
RBZ Governor Dr John Mangudya announced the new cash limit in a Statutory Instrument made in terms of the Exchange Control Act.
The US$10 000 limit in baggage or pocket can be cash in any foreign currency, gold coins or in any desired combination of foreign currencies or gold coins.
Besides the limit for foreign currency banknotes and gold coins, travellers can also take out the equivalent of US$1 000 at the interbank rate in "demonitised" Zimbabwean notes and coins.
Anyone intending to carry more than US$10 000 in notes and coins, rather than making electronic transfers, requires exchange control approval.
Diplomats are not subject to these limits.
"It is an improvement from the US$5 000 that was there before and its meant to relax capital controls in terms of export of cash. It's critical in terms of engendering greater levels of confidence within the economy. The more relaxed the control, the greater improvement in confidence in the economy," said Dr Chitambara.
Another economist said it was another step in opening up the economy.
"What is important is to have less controls as much as possible. That is what the RBZ has done and it is quite positive," said the economist.
Harare-based economist Professor Gift Mugano said while the legal instrument would help to remove controls, he expressed reservations on the new limit.
"It does not stimulate economic growth but rather will expedite draining of foreign currency from the country. The net effect of this is a liquidity crunch particularly now since we are now dollarised.
"You are aware that we have a large informal sector and by increasing the amount of money which can be taken out of the country to US$10 000, we have really taken a position to take oxygen out of our system," said Prof Mugano.
"The most important exchange controls which must be dealt with relate to export retention and liberalisation of exchange rate. Increasing foreign currency which can be taken out is merely draining oxygen from our system."
Source - The Herald
