Central bank suspends 30-day liquidation requirement

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  • RBZ suspends 30-day liquidation requirement
  • firms receiving foreign currency from domestic transactions to deposit the funds in local FCA
  • flagging of importers and the penalty system has also been suspended.

With a deepening Corona Virus crisis and weakening economic fundamentals, the RBZ has once again issued a directive to cement the stance taken to reintroduce the multi-currency regime. In the most recent update, The Reserve Bank of Zimbabwe has suspended the 30-day liquidation requirement on un-utilized foreign currency balances for exporters to support its use of the free-funds policy.

This comes less than 10 days after the RBZ announced the use of foreign currency to pay for goods and services alongside the Zimbabwe dollar. The central bank then pegged the local currency at an exchange rate of 1:25 to the US dollar. This, a series of interventions purported by the central bank to mitigate the economic effects of the pandemic.

To support the measures, the central bank, in an Exchange Control Directive, says that the firms receiving foreign currency from domestic transactions will be mandated to deposit the funds in local FCA for own use. As such, inter-FCA transactions have been activated to facilitate payments.

The RBZ also reinforced the use of electronic payment systems for transactions using the FCA Nostro accounts.

Furthermore, The 30-day liquidation requirement on unutilized forex balances for exporters has been suspended until further notice when markets return to normal in the aftermath of the Corona Virus.

In the same bracket of RBZ’s measures, the flagging of importers and the penalty system has also been suspended.

This comes as the world reaches 809 000 confirmed COVID-19 cases and the death toll nears 40 000 the world over. Zimbabwe currently has 8 confirmed cases and one death.

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