RBZ introduces inter-bank foreign currency market

The Reserve Bank of Zimbabwe (RBZ) has established an inter-bank foreign currency market, where banks and bureau de change would trade in currency including RTGS dollars on a willing buyer, willing seller basis.

Presenting the 2019 Monetary Policy statement in Harare yesterday afternoon, RBZ Governor, Dr John Mangudya said the interbank system, which will see RTGS balances, bond notes and coins being immediately denominated as RTGS dollars, is set to bring sanity and will go a long way in balancing the economy.

“An inter-bank foreign exchange market to formalise the selling and buying of US$s and other currencies through banks and bureaux de change….is essential in order to bring sanity in the foreign currency market whilst at the same time promoting exports, diaspora remittances and investments for the good of our national economy,” Dr Mangudya said.

The Governor also confirmed that the central bank has arranged sufficient lines of credit to enable it to maintain adequate foreign currency to underpin the foreign exchange market.

He also said the existing Section 44b of the RBZ Act is being changed to accommodate the RTGS dollars, which shall be used by all local entities.

“The RTGS dollars thus become part of the multi-currency system in Zimbabwe. The legal instrument to give effect to this has been prepared. The RTGS dollars shall be used by all entities (including government) and individuals in Zimbabwe for the purposes of pricing of goods and services, debts, accounting and settlement of transactions,” Dr Mangudya said.

The RBZ has projected that the use of RTGS dollars for domestic transactions will eliminate the existence of the multi-pricing system and charging of goods and services in foreign currency within the domestic economy, with prices stabilising.

Another major highlight of the Monetary Policy statement is the putting in place of oa a local Nostro foreign currency accounts (FCA) settlement platform on the 25th of February to allow for domestic inter-bank settlement of Nostro FCA transfers.

This follows the successful separation of RTGS FCAs and Nostro FCAs.