Harare – Finance and Economic Development Permanent Secretary, George Guvamatanga on Monday said shenanigans in the banking sector prompted the separation of Foreign Currency Accounts (FCAs) and real time gross settlement (RTGS) accounts by the Reserve Bank of Zimbabwe.
In the early weeks of October, the RBZ gave banks until mid this month to create separate nostro (external bank) foreign currency accounts (FCAs) and real time gross settlement (RTGS) FCA accounts, as part of measures to preserve value for foreign currency earners and to boost market confidence.
The RBZ governor Dr John Mangudya said he expects the measure to strengthen the multi-currency system for financial and price stability and to increase inflows of foreign currency while buttressing Government’s economic reforms started last year.
Presently, foreign currency allocation in Zimbabwe is controlled by the central bank through a priority list framework to ensure equitable distribution and guarantee availability for critical import requirements.
The new policy forms part of measures to boost confidence and transparency in the foreign currency market and rein in inflation by mitigating rent seeking behaviour and mopping up excess liquidity within the economy.
At one point it was trading at about 400 percent on the black market further pushing price hikes among retailers thus overburden the generality of Zimbabweans, mostly of them survive on a hand to mouth basis.
Appearing before the Parliamentary Portfolio Committee on Finance and Economic Development, Guvamatanga said separation of FCAs and RTGS accounts had become inevitable as most banks were fisting into clients’ accounts robbing them of the precious United States dollar.
“The separation of FCA accounts and RTGS accounts was necessary as the singular system was now disadvantaging those with access to free funds, such as non-governmental organisations, exporters and those who receive money from the Diaspora.
“Because if you receive US$200 you shouldn’t be forced to rush to spend it because there is nowhere else to keep it or keep it under your pillow because there is no separation.
“So to protect those with access to such funds, it was very important to separate so that there is no confusion and I know — I come from the banking sector that in the past if you received money from the diaspora or from whatever source some banks would tell you that you can now access 70 percent of your money because the Reserve Bank said we should take the other 30 percent, which was not true.
“So there was an element of market indiscipline that was now starting to creep in and discouraging those with access to US dollars from bringing it into the formal system and we were trying to address that matter by saying let’s separate the accounts under the multi-currency system, which is still Government policy as we speak.”
– Equity Axis News