Monetary Policy Key Highlights and Measures Featured

02 Oct 2018
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Key Highlights

  • We are where we are cause electronic dollars are more than real dollars- local dollars coming from the government
  • Economy requires rightsizing
  • Root cause of money supply growth is fiscal imbalances
  • 8bn Government borrowing, which is more than market deposits ($9.7bn)
  • Issue not about changing currency


  • Strengthen multicurrency system – separate FCA accounts
  • Ring fence foreign currency earners- Nostro FCA accounts and RTGS FCA accounts
  • Immediate effect- new money coming in or that which was already being Ring fenced
  • Expectation is not necessarily new accounts to be opened
  • People must know they don’t have foreign currency
  • Negotiated with Afrexim for a Nostro stabilization facility of $500m- to be in place by end of October
  • Nostro foreign currency accounts pertains to free funds, exporters, portfolio investors etc
  • Gold 30%, platinum and chrome 35%, tobacco 20% and others are 100%
  • Banks to align systems by 15 October
  • Banks pay interest on Nostro foreign currency accounts
  • No more 14 day window period for use of foreign currency
  • Rate parity is going to be maintained
  • Facilities to support RTGS foreign currency accounts for critical commodities - adding up to almost $500m from various lenders
  • External Debt Arrear clearance expected within 6 months
  • Foreign currency payments – minimize externalisation
  • Invoice name should match account details
  • High value transactions to be done via LCs
  • Export proceeds to be remitted on time
  • Purchase of fuel to be done in foreign currency by all international truckers.
  • Same applies to foreigners buying goods in Zimbabwe e.g. fuel and cooking oil
  • Purchase of gold by jewelers from Fidelity now in foreign currency not RTGS
  • Settlement of capital gains tax in foreign currency if selling property in foreign currency
  • Disinvestments of investments outside Zimbabwe – the funds must be remitted back to Zimbabwe
  • Introduction of Stat reserves to reduce liquidity – 5% on RTGS foreign currency account with effect from 1 November 2018 on a weekly compliance basis
  • AFTRADE window remain open for those entities requiring interbank support
  • Introduction of TB auction system wef 1 Nov. Currently the RBZ was not being the involved in the pricing discussions.
  • Continuation of the savings bonds. End of August it was $1.5bn
  • Construction facility fund to be introduced - All in interest rate of 10%
  • Reminder of capitalisation levels which are due 2020
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