Martin Kadzere Senior Reporter
Recipients of international remittances will continue receiving money in hard currency following the abolishment of multi-currency system or can be paid in local currency at a prevailing official exchange rate, the Reserve Bank Zimbabwe has said.
This also applies to cash withdrawals by individuals who hold Foreign Currency Accounts Nostros. While unconditional cash withdrawals by companies have been removed, banks are permitted to consider special withdrawal requests from corporates.
International remittances, alongside exports, remain one of the largest sources of foreign currency with inflows from migrants and US$619,2 million was realised last year.
This only pertains to diaspora remittances that were sent through formal channels. According to official estimates, this amount could be two to three times higher.
On Monday, the Government declared the RTGS (now Zimdollar) the sole legal tender, effectively abandoning the multi-currency regime, which Zimbabwe adopted in 2009 when hyperinflation rendered the Zimbabwean dollar worthless.
Government announced that the United States dollar, South African rand, Botswana pula and other foreign currencies were no longer legal tender in Zimbabwe.
The introduction of the RTGS dollar in February this year marked the first step towards the ongoing currency reforms, with the country expected to have a full domestic currency by the first quarter of 2020. After outlawing the use of foreign currencies and until late Tuesday, it was unclear whether recipients of international remittances would continue withdrawing their money in foreign currency.
In a statement, the central bank said international remittances will continue to be paid in foreign currency.
“In order to encourage and facilitate the flow of foreign currency, diaspora remittances shall continue to be received in foreign currency,” said the RBZ.
“The recipients shall have the option to receive in cash or sell
their remittances on a willing buyer willing seller basis to Bureaux de
Change or authorised dealers or deposit into individual nostro
The limit of cash exports remains at US$2 000.
In a radio interview with Star FM, central bank Governor Dr John Mangudya said individuals holding FCA Nostros can still withdraw their money in foreign currency.
Government announced that the United States dollar, South African rand, Botswana pula and other foreign currency were no longer legal tender in Zimbabwe.
Finance and Economic Development Minister Professor Mthuli Ncube said Government had taken the decision after noting that the market was choosing to price a number of goods and services in US dollars when the majority of Zimbabweans earned local currency.
He said apart from enabling everyone to transact — those with and without access to foreign currency — the new measures would give the Reserve Bank of Zimbabwe full monetary policy control to defend the value of the domestic currency. The Treasury chief noted that key fundamentals to support a local currency, including controlled Government expenditure and budget surpluses, were now in place.