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Zimbabwe's Reserve Bank clarifies foreign currency policy

By , Journalist
Zimbabwe , 26 Jun 2019

Zimbabwe's Reserve Bank clarifies foreign currency policy

Zimbabwe will allow access to foreign currency cash only to recipients of diaspora remittances and to individual foreign currency account holders while it is reportedly evaluating modalities around payments for pay television service, MultiChoice, in forex.

The struggling southern African country this week banned use of foreign currency to settle transactions inside the country.

It also introduced the Zimbabwe dollar as a substantive currency, ending a multiple currency regime in place since 2009.

The Reserve Bank of Zimbabwe (RBZ) has clarified that remittances via money transfer agencies and via foreign currency accounts held by individuals will still give access to US Dollar notes or other currencies such as the rand.

"For individuals, the current policy (which gives individual FCA account holders access to withdraw their foreign currency funds in cash) shall remain in force," said the Zimbabwean central bank on Tuesday evening.

It further states that "diaspora remittances shall continue to be received in foreign currency" as a measure of encouraging and facilitating remittances through formal channels.

The recipients still have the option to "receive remittances in cash or sell their remittances on a willing seller willing buyer basis."

RBZ has reportedly not yet resolved on payment modalities for DStv and is expected to make an announcement regarding this in due course.

Minutes of a meeting between central bank and banking sector executives on Tuesday read in part regarding DStv payments: "(On) DStv to consult as they offer (a) foreign service and are also local."

Prepaid MasterCard and Visa transactions have also been allowed to continue "in terms of funding" and requiring banks to institute Know Your Customer (KYC) principles.

However, "engagements to be done with VISA/MasterCard" regarding finalisation of usage of credit and debit card usage for local purchases.

Export companies, non-governmental organisations and other corporations strictly have to sell their forex holdings on the official interbank market.

They will also not be allowed to withdraw forex in cash and are required to pay salaries in the newly introduced Zimbabwe dollar.

Its reliance on mobile money and digital finance has also been impacted by rampant usage of the platforms for illegal currency dealings, forcing operators to impose transaction limits.

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