Zimpapers Logo

Oliver Kazunga/Natasha Chamba, Business Reporters
THE creation of separate nostro (external bank) foreign currency accounts (FCAs) and Real Time Gross Settlement (RTGS-FCA) among other measures by the Reserve Bank of Zimbabwe (RBZ) will go a long way in stabilising the currency situation and generating the much needed foreign currency to boost production.

The apex bank, in its monetary policy statement issued Monday, gave banks up to mid-month to ensure separate nostro foreign currency and RTGS FCA accounts. The move has been buttressed by a $500 million strategic import cover and an addition $500 million for nostro stabilisation.

Economic commentators yesterday lauded the bold decision. Association for Business in Zimbabwe chief executive officer Mr Victor Nyoni said: “What is very important to us as business is that Government is making an attempt to create enough base for generation of forex or rather to even render forex only for the purposes of settling foreign payments rather than for local transacting,” he said.

RBZ hopes the measure will strengthen the multicurrency system for financial and price stability while bolstering the Government’s economic reforms. The new policy is set to arrest illegal currency trading that has been happening through RTGS system in the country involving different players. Mr Nyoni, however, said the separation of accounts was a disadvantage to ordinary bankers who have literally been slotted on the non-forex bracket.

“You would note that all people have had the impression that they were sitting on US dollars and suddenly they are being told now that those are mere RTGS amounts. But on the business side that will enable us to make foreign payments,” he said.

The economists hoped the move would curtail demand for forex on black market but stressed the need to beef up domestic production as a lasting solution.

Businessman and former Zimbabwe National Chamber of Commerce president, Mr Luxon Zembe, said the move by the RBZ allows ordinary people to also deposit their forex earnings into banks.

“It now means people can deposit their foreign currency earnings directly into those (FCA) accounts and when they need it, say they want to travel, they can withdraw it. It’s a positive move in terms of making sure that people don’t lose value for their foreign currency. It also gives them access to that forex as and when they want it,” he said.

Mr Zembe said banks would be obligated to make sure that if people deposit their money in foreign currency they will get their forex.

“What is missing are the incentives for those deposits. I would have wanted to see all transaction charges being removed from foreign currency accounts so that it encourages people to bank all their forex.

“That way we will begin to restore confidence into the market and also protecting the value of the forex received either through diaspora or exports,” he said.

Economists hope the parallel market was being driven by factors that include the liquidity crunch and warned this situation would persist until the economy has sufficient cash in circulation.

Mr Paison Tazvivinga, an economic analyst, said the monetary policy would largely foster macro-economic stability, promote growth supportive environment and achieve progress in employment creation and structural transformation. He applauded measures to transform state-owned entities as a critical move to increase economic activity by addressing underlying issues of mismanagement, looting, inefficiencies and corruption.