USD-denominated RTGS transactions to boost liquidity
The inclusion of USD electronic payments on the RTGS platform expected to begin on the 1st of February is a milestone in enhancing the multi-currency system and towards increasing the circulation of US dollars in the economy.
The multi-currency system and foreign currency liquidity in the economy is expected to be harnessed following revelations that the Reserve Bank of Zimbabwe is conducting tests to include FCA nostro payments on the real time gross settlement, commonly known as RTGS.
Since the separation of RTGS accounts and FCA nostro accounts on the first of October last year, the RTGS platform had excluded USD electronic payments.
Economist Mr Persistence Gwanyanya explained that this is a big signal towards currency reforms and de-dollarisation.
“This move is a landmark decision aimed at responding to industry’s calls to do something on the currency but obviously it will be easy for industry to make payments easily in USD forms,” said Mr Gwanyanya.
Mr Gwanyanya also hinted that this might also signal the resuscitation of the forex interbank market.
Another consultant Mr Dominic Jairos described the move as aimed at improving USD liquidity and reducing the need for cash in the economy.
“Business at the moment is operating on a cash basis by withdrawing cash and make physical deposits and that was limiting liquidity of the USD and increasing the need for physical cash but this is significant in taming the need for cash,” Mr Jairos said.
At the moment payments are restricted to cash or telegraphic transfers in case of foreign obligations which are cleared in the US.
This move by the reserve bank is a continued trail of economic reforms aimed at stabilising the economy as enunciated by the Transitional Stabilisation Plan.