Africa Moyo Business Reporter—
THE Reserve Bank of Zimbabwe (RBZ) has increased the amount of foreign currency an individual can carry outside the country to $2 000 with immediate effect. RBZ had put the limit at $1 000 on May 5 last year. Presenting the Mid-Term Monetary Policy Statement in Harare yesterday, RBZ Governor Dr John Mangudya said the review has been necessitated by the need to move closer to the limit enshrined in the law.
“The carrying of foreign cash on person to exit from Zimbabwe has been reviewed to an equivalent amount of $2 000 per individual per exit with immediate effect.
“Amounts in excess of this amount require prior exchange control approval. We never said no one should take above $2 000, but what we are saying is that those with appetite to carry more, you need prior exchange control approval through the normal banking channels,” said Dr Mangudya.
Dr Mangudya explained that the increase was necessitated by the need to avert potential court battles since an existing Statutory Instrument allows people to carry up to $5 000.
The RBZ boss said the decision to increase the exportable foreign currency was “very simple”.
“The Statutory Instrument that is in place right now says $5 000 (and) the policy says $1 000. So for lack of wisdom or thereabout, we thought that we settle at $2 000 so as to take into account the Statutory Instrument which says $5 000 and the policy.
“We are synchronising the two and the best way to synchronise the two was to do what we have just done . . . definitely there was confusion within those who are administering the piece of legislation.
“Someone was holding the Statutory Instrument (and) it says $5 000 and someone was holding the policy, it says $1 000. So at the end of the day you don’t want to waste time going to court, so what we have done is what is there,” said Dr Mangudya.
The RBZ plans to engage the Zimbabwe Revenue Authority (Zimra) in the battle to ensure that individuals without prior clearance from the Exchange Control Unit of the RBZ are prevented from shipping more than $2 000 outside the country.
However, diplomats carrying more than the threshold are not subjected to the new limit.
Dr Mangudya said it is “not Government policy” to confiscate funds belonging to diplomats.
He said the central bank had received “a number of enquiries” from diplomats wanting to establish Government’s stance on the confiscation of money they hold which is in excess of the limit.
The RBZ believes the new limit, together with several other measures such as increasing production and exports, and concluding a $600 million nostro stabilisation facility with the African Export-Import Bank (Afreximbank) would help boost foreign currency generation, and consequently stem shortages in the country.
Currently, the stock of money in circulation is made up of bond coins ($25 million), bond notes ($175 million) and multi currencies which are estimated to be $800 million.
This means about $1 billion is circulating in the economy, but the bulk is in the informal economy.
The central bank says if the $1 billion was circulating in the formal economy, it was adequate to support usable bank balances.