Last week the RBZ announced the use of foreign currency to pay for goods and services alongside the Zimbabwe dollar at a fixed exchange rate of $25 to the US dollar as part of various interventions being pursued in response to the financial vulnerabilities caused by the Covid-19 pandemic.
To support the measures, the central bank, in an Exchange Control Directive, says that corporates receiving free funds from domestic transactions will be required to deposit the funds in local FCA for own use. As such, inter-FCA transactions have been enabled to facilitate payments.
The chief bank continued to encourage the use of electronic payment systems for transactions using the FCAs
The 30-day liquidation requirement on unutilised forex balances for exporters has been suspended until further notice when markets stabilise from the effects of COVID-19. "All exporters shall therefore be treated as green flagged for the smooth administration of all export receipts until further notice," said the RBZ.
The flagging of importers and the penalty system has also been suspended.
Market concern remains around an expected increase in money supply, which might have shock effects on the economy but while acknowledging that the measures will not solve the economic problems, if handled properly and if there is restraint on the printing machine, they could be crucial to restoring the value of the Zimbabwean dollar.
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