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RBZ speaks on FCA Nostro Accounts

By Albert Nxumalo

The Reserve Bank of Zimbabwe (RBZ), Wednesday, moved to calm the panicking banking public stressing that holder of Foreign Currency Accounts (FCAs) will be allowed to access their savings.

On Monday, the central bank ended the 10-year multi-currency regime, and directed that all domestic transactions will now be completed using the RTGS currency and announced the re-introduction of the Zimbabwe dollar.

This caused great anxiety in the markets giving rise to speculation that foreign currency withdrawals have been banned.

In countering speculation on the market with regards to cash withdrawals, the apex bank said there are no changes to withdrawal regulations.

“Further to our Directive, the Reserve Bank wishes to advise that contrary to certain information being circulated on social media, cash withdrawals by individuals are still permissible and the policy position hasn’t changed,” said the bank.

“Individuals are still able to withdraw their cash from their individual accounts and banks are, in line with international best practice, expected to apply the AML/CFT principles.

It added: “The current withdrawal limit for individuals remains US$1000 per day”.

For corporates, monetary authorities said banks shall apply the KYC principle for any intended cash withdrawals.

President Emmerson Mnangagwa on Tuesday told journalists in Victoria Falls that the economy was “restoring to normalcy”.

He said it was “unfair and unsustainable” for prices to be tagged in foreign currency when few people earn it.

“When the majority earn in the local currency, but goods are priced in US dollars, the outcome will only ever be a two tired economy, stable and affordable prices for those with access to dollars, while the majority face an unrealistically high costs of living.

“This is unfair and unsustainable” he said.

He added that “people will still be paid in RTGS dollar and bond notes and goods and services will be priced in the same currency.

“Those holding Nostro accounts will still have access to those accounts in the currency they held”.

The new cocktail of measures has been met with mixed reactions with the country’s largest labour body, Zimbabwe Congress of Trade Unions (ZCTU) threatening protests over the government’s decision to ban the use of foreign currencies and make the interim currency the sole legal tender.

The central bank announced this in a Statutory Instrument 142 of 2019.

The government gazette instructs that the United states dollar, Botswana Pula and South Africa Rand are no longer legal tender in Zimbabwe.

The SI reads in part: “Subject to section 3, with effect from 24th June 2019, the British pound, United States dollars, South African rand, Botswana pula and any other foreign currency whatsoever shall no longer be legal tender alongside the Zimbabwe dollar in any transactions in Zimbabwe.

The multicurrency system allowed trade to be completed using major currencies, the US Dollar, Pound Sterling, Rand, and the Pula.

The RTGS Dollars were introduced in February 2019 where the government announced that its rate against other international currencies would be floated on the Interbank Foreign Exchange Market ending the previous 1:1 rate.

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