RBZ completes validation of Blocked Funds

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  • 350 transactions with a value of US$457m processed by RBZ
  • The respective local currency should be transferred to the Bank by 30 April 2020
  • In February, RBZ had validated blocked funds amounting to US$1.2 billion.

In the most recent update issued on Friday, The Reserve Bank of Zimbabwe announced that the process of validation of foreign exchange applications submitted under the Blocked Funds Framework announced in the Monetary Policy Statement on 22 February 2019 had been completed.

The completion of the process relates to a balance of 350 transactions with a value of US$457m which was being processed against a February 29, 2020 deadline.

In February, in the presentation of the 2020 Monetary Statement, RBZ Chief informed that the RBZ had processed and validated blocked funds amounting to US$1.2 billion.

At the same time, the central bank had rejected about US$861m legacy debt claims for lack of supporting documents and double-dipping, in a move toward clearing the blocked funds.

RBZ further advises that all approved blocked funds transactions, the respective local currency should be transferred to the Bank by 30 April 2020 through normal banking channels.

In the presser is a key caveat detailing how relevant firms should proceed:

“In order to ensure that companies comply with the 30 April 2020 deadline approved by respective regulatory authorities for the ­finalisation of their audited ­financial statements, and given the constrained working arrangements as a result of the COVID-19 pandemic, all blocked funds appeals that meet the laid down criteria but are not received by 30 of April 2020 will be considered null and void.”

The viability of several companies has been under serious threat as a result of legacy debts, denominated in foreign currency following far-reaching currency reforms by the government in June last year.

This comes after about 50% of the total bank deposits amounting to about ZWL$34.5bn was in the hands of about 200 entities at the end of December 2019.

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