RBZ boss Mangudya buckles

Source: RBZ boss Mangudya buckles – NewsDay Zimbabwe May 11, 2016

The Reserve Bank of Zimbabwe (RBZ) has buckled under pressure, scrapping the requirement for the apportionment of export receipts in the South African rand and the euro following an outcry from exporters.


In a notice yesterday, RBZ director of exchange control Moris Mpofu said the tweaking of the policy was in “recognition of the need to improve the ease of doing business, improve exporter viability and competitiveness while further enhancing the spread of liquidity generated from exports of goods and services, the production and marketing of tobacco and gold”.

Mpofu said authorised dealers of all new foreign exchange receipts from exports of goods and services denominated in the United States dollar “shall be transferred to the Reserve Bank immediately on receipt and the remainder credited in the exporter’s foreign currency account (FCA) in dollars.

“On receipt of the 50% export proceeds into its nostro account, the Reserve Bank shall immediately credit the same amount plus 5% export incentive/bonus in US$ into the authorised dealer’s RTGS [Real Time Gross Settlement] account for the account of the exporter,” he said.

“Accordingly, the requirement for the apportionment of 50% of foreign exchange into 40% South African rand and 10% euro has been removed with immediate effect.”

In his measures to promote the use of the multi-currency regime and solve the cash crisis, RBZ governor John Mangudya last week decreed that 40% of all new export proceeds, including tobacco and gold, were going to be converted at the official exchange rate to the South African rand and 10% to euros.

The measure became operational with effect from May 5.

“This policy measure is designed to ensure that we spread the demand for cash among a wide range of currencies and in order to mitigate against concentration risks,” Mangudya said.

The move was condemned by exporters who argued that the RBZ was forcing them to hold a volatile currency like the rand, warning the central bank was “killing the goose that lays the golden eggs”.

Mpofu said where exporters’ foreign currency earning based on the currency declaration forms, known as CD1, acquittals “are denominated in other currencies in the multi-currency basket, such proceeds shall be credited 100% into the respective exporter’s corporate FCA”.

He said a 5% export incentive would be paid into the US$ FCA.

Mpofu also added on the top of the priority list transactions such as remittance of rental income from properties owned by non-resident Zimbabweans and foreigners, remittance of pension income for non-resident Zimbabweans who formally emigrated from Zimbabwe and the importation of packaging material not available in the country.

Last week, Mangudya announced a priority for imports meant to ensure the scarce resources are deployed towards importing raw materials to boost local industries.

Mpofu also announced the scrapping of a 10% threshold on nostro balances and removal of a 15% threshold on cash holdings by banks. The two thresholds were removed with effect from yesterday.