Tawanda Musarurwa Senior Business Reporter
The Reserve Bank of Zimbabwe (RBZ) will introduce Foreign Currency Accounts (FCAs) that will be utilising the real time gross settlement system (RTGS) by the end of this month.
This comes as the central bank abandoned the 1:1 rate for United States dollars against RTGS balances/bond notes by introducing an inter-bank Foreign Exchange Market.
RBZ Governor Dr John Mangudya announced the development yesterday while presenting the Monetary Policy Statement.
“Given the successful completion of the separation of RTGS FCAs and Nostro FCAs, the Bank, is with effect from February 25, 2019, putting in place a local Nostro FCAs settlement platform to allow for domestic inter-bank settlement of Nostro FCA transfers,” he said.
Last month, RBZ deputy director for financial markets division — National Payment Systems — Joseph Mutepha, said the apex bank had begun tests of an upgrade to the RTGS platform, which had been upgraded to include the United States dollar to facilitate settlement of USD Nostro FCA transactions.
FCAs were introduced last year at the beginning of October as an alternative for banking customers in Zimbabwe and the move was widely seen as an acceptance by Government that Bond Note and RTGS balances where not equivalent to the US dollar.
FCAs were, however, not part of the RTGS or the ZIPIT platform.
And the FCAs have been largely successful, according to latest figures provided by the central bank governor.
“The separation of bank accounts into Nostro FCAs and RTGS FCAs has yielded positive results as reflected by the significant increase in the Nostro FCAs to US$451,2 million as at January 31, 2019, compared to US$240,5 million at the beginning of October 2018, a growth of 87,6 percent,” said Dr Mangudya.
The ability of FCAs to settle through the RTGS platform should enhance the move to “liberalise” the foreign currency trading market.
“The Bank has taken note of the excellent contributions from the business community, bankers, the academia, the media and members of the public on the need to establish an inter-bank foreign exchange market to formalise the selling and buying of USDs through banks and bureau de change. This 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.
“The Bank considered the implications —accounting, financial, economic, legal and social — that are embedded in the establishment of an inter-bank forex market within the context of the current national payment systems made up of RTGS, mobile payment platforms, point of sale (POS), bond notes and coins,” said Dr Mangudya.
“After taking account of the implications and putting in place safeguards to maintain stability in the fares market, the bank is, with immediate effect, establishing an inter-bank foreign exchange market in Zimbabwe to formalise the trading of RTGS balances and bond notes with USDs and other currencies on it willing-buyer willing-seller basis through banks and bureaus de change.”