RBZ reinstates 30-day forex liquidation

Harare, (New Ziana) – The Reserve Bank of Zimbabwe (RBZ) said on Tuesday the statutory 30-day forex liquidation period will be restored once again from next month to help lubricate the inter-bank market.

In February 2019, the RBZ introduced a 30-day retention period for all export earnings, after which the funds were to be offloaded or sold on the inter-bank market at the ruling exchange rate.

But, in light of the Covid-19, the central bank temporarily suspended the requirement.

But bank governor John Mangudya said in a statement that the RBZ’s Monetary Policy Committee had decided to reinstate the 30-day forex liquidation requirement, in part to ensure greater liquidity on the inter-bank market.

“The Committee also resolved to reinstate, with effect from 1 July 2020, the 30-day limit of liquidating surplus foreign exchange receipts from exports in order to ensure that more foreign exchange was released onto the market,” he said.

The bank also reduced the statutory reserve ratio – the percentage of deposits that a bank keeps at the RBZ – from 4.5 percent to 2.5 percent in an effort to assist economic recovery.

“As part of efforts to assist in the recovery and growth of the productive sectors of the economy and to help with post Covid-19 recovery, it was resolved that there was need to release more ­financial resources for the productive sectors of the economy by banks,” he said.

“To assist that process, the Committee resolved to reduce the statutory reserve ratio from the current 4.5 percent to 2.5 percent with effect from 8 June 2020.”

The Committee also expressed serious concern over the continued deterioration in the exchange rates that were widely being used by the private sector. However, it welcomed action taken by the Bank to curb speculative trading in foreign exchange using electronic banking platforms.

“It was resolved that a formal market-based system of foreign exchange trading will be put in place. To ensure that foreign currency trades were monitored in real time, the Committee urged the Bank to expedite the implementation of the electronic foreign exchange trading system for compulsory use by bureaux de change,” Mangudya said.
New Ziana