October 20, 2018

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Zimbabwe To De-dollarize

Zimbabwe To De-dollarize

President Mnangagawa’s government has technically de-dollarized the economy by reintroducing local currency bank accounts, which will be traded in electronic transfers and bond notes only, and piled more taxes on the transacting public.

Reserve Bank of Zimbabwe (RBZ) governor John Mangudya, in a monetary policy statement presented yesterday, directed banks to create nostro accounts for foreign currency transactions (nostro FCAs), which will run separately from existing bank accounts, now limited to RTGS (real time gross settlement) transactions and bond notes only.

The measures, which will technically de-dollarize the economy and reduce existing FCAs to local currency accounts, take effect on October 15.

Mangudya said the Africa Export-Import Bank has agreed to provide a $500 million guarantee to the new nostro FCAs, which have been created to cater for exporters and other foreign currency earners.

It means non-foreign currency earners, who wish to open nostro FCAs, would have to fully fund their accounts with foreign currency.

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