|
The policy announcement therefore zeroed
in on foreign exchange issues that dealt
with reforms in the foreign exchange
market so as to guarantee viability
for all generators of foreign exchange,
whilst at the same time, ensuring its
availability and affordability to users
of foreign currency, particularly the
non-exporting producers of basic goods
and services.
1. WILLING BUYER
WILLING SELLER FOREIGN EXCHANGE MARKET
To ensure availability of foreign
exchange to priority sectors, at the
same time guaranteeing exporter viabillity,
the Reserve Bank has, with immediate
effect, introduced a willing-buyer,
willing-seller priority-focused twinning
arrangement in the foreign exchange
market.
Under this framework,
Authorized Dealers will match sellers
and buyers of foreign exchange, guided
by a predetermined priority list as
set from time to time by the Reserve
Bank, in consultation with stakeholders
across the country’s sectors.
Authorized Dealers are obliged to
match foreign exchange sellers and
buyers in conformity with the following
priority thresholds:
INTER-BANK
FOREIGN EXCHANGE MARKET ALLOTMENT
PRIORITY LIST (IBFX-MAPL)
| PRIORITY
AREA |
RANK
OF PRIORITY AREA |
AVERAGE
FOREIGN EXCHANGE TO BE ALLOCATED |
| Food,
Food Production, food-related
machinery and spare parts, chemicals,
fertilizers, seeds, animal drugs,
additives and related ancillaries,
grain, seeds. |
A |
35% |
| Fuel
and Electricity |
B |
20% |
| Other
Non-Food Industrial inputs, machinery,
equipment and spare parts, chemicals,
packaging. |
C |
20% |
| Public
and Commercial transportation,
including vehicular spare kits,
tyres, batteries, wind shields
and other essentials for production. |
D |
5% |
| School
Fees, business travel, professional
fees, IT licences and dividends |
E |
10% |
| Medical
Drugs, medical equipment and consumables |
F |
10% |
| TOTAL |
|
100% |
2. PRICING OF
FOREIGN EXCHANGE
The Reserve Bank of Zimbabwe noted
that the pricing of foreign exchange
is a critical signalling tool that
influences the overall performance
of the economy. In this regard, its
pricing has to take into account the
need to incentivise all its generators
to remain viable, whilst at the same
time minimizing the unintended adverse
consequences on the vulnerable segments
of society.
The following foreign
exchange pricing framework has been
adopted with immediate effect:
THE NEW FRAMEWORK
| |
(a) |
In
the case of exporters, on date
of receipt of export proceeds,
the applicable surrender level
is sold to the Reserve Bank at
the inter-bank rate, and the rest
of the proceeds is deposited in
the FCA for own use and sales
into the inter-bank market after
holding the deposit up to a maximum
of 21 days. |
| |
(b) |
In
the case of all the other generators
of foreign currency, or exporters
liquidating their FCA balances,
funds are sold on a willing-buyer,
willing-seller basis, through
formal banking channels (Authorized
Dealers) at the ruling inter-bank
foreign exchange pricing level. |
| |
(c) |
Every
business day, each bank (Authorized
Dealer) shall display the average
buying and selling prices for
foreign exchange, it would be
offering to willing buyers and
willing sellers; |
| |
(d) |
Where
the portion sold to the Central
Bank falls short of needed Government
strategic imports and other foreign
payments, the Reserve Bank shall
procure its needs from the inter-bank
market; |
| |
(e) |
NGOs,
Embassies, International Organizations,
Zimbabweans in the diaspora, as
well as all other foreign currency
holders can dispose their foreign
currency at any Authorized Dealer
of their choice at the displayed
inter-bank prices. |
| |
(f) |
Homelink
and other Money Transfer Agencies
(MTAs) will on-sale their foreign
exchange purchases to the Reserve
Bank. |
| |
|
|
3. FCA RETENTION
PERIOD
The Reserve Bank advised that in order
to ensure that there is support to
the economy’s productive sectors
through greater circulation of foreign
currency, the enhanced foreign exchange
retention levels will be held in corporate
FCAs up to a maximum of 21 days, after
which the balances should be sold
into the inter-bank pool of resources
for auctioning to priority foreign
currency users.
With immediate effect, all exemptions
previously granted on surrender requirements
are hereby cancelled, including exemptions
on incremental export incentive scheme.
4. FCA DEPOSITS
AT THE RESERVE BANK
The Reserve Bank announced that with
immediate effect, all corporate bodies,
NGOs, International Organization who
have outstanding FCAs with the Reserve
Bank, can now elect to adopt one of
the following alternatives:
| |
|
(e) |
NGOs,
Embassies, International Organizations,
Zimbabweans in the diaspora, as
well as all other foreign currency
holders can dispose their foreign
currency at any Authorized Dealer
of their choice at the displayed
inter-bank prices. |
| |
|
(b) |
Receiving
the local currency equivalence
at the fair value exchange levels
as determined in the inter-bank
market, or;
Maintaining their foreign currency
claims and make foreign payments
or withdrawals as the overall
reserves position of the Reserve
Bank improves. |
| |
|
(c) |
Exporters
can elect to pay themselves from
the Reserve Bank’s entitlements,
or they can find sellers of foreign
exchange and match themselves
to repay the outstanding FCAs
with the Reserve Bank providing
the local currency. |
5. EXPORT AND
IMPORT OF LOCAL CURRENCY CASH
In an effort to bring
convenience to the public travelling
outside the Zimbabwean border, the
amount of local currency that can
be exported or imported on a person
or in his or her baggage to pay for
various travel related expenses at
the border posts, was increased to
Z$5,000,000,000 (five billion dollars),
with immediate effect. Previously
the limit was
Z$500 million.
6. CASH WITHDRAWAL
LIMITS
The daily cash withdrawal limit for
both individuals and corporates is
now Z$10,000,000,000 (Ten Billion
Dollars).
7. STRATEGIC
IMPORTS
In order to encourage holders of free
funds, both individuals and corporates
to import critical requirements, the
Reserve Bank introduced a Strategic
Import Fair-Value Asset Swaps programme
(SIFVAS).
Under this framework,
holders of foreign exchange balances
can bring in essential imports in
exchange for domestic assets equivalence
in shares, real estate and FCA retention
exemptions, among many other alternatives.
Prior Exchange Control Authority has
to be obtained through the importer/customer
(bank(s).
The qualifying import
priority list under this programme
includes the following products:
| |
(a) |
Fertilizers; |
| |
(b) |
Agro-chemicals;
|
| |
(c) |
Certified
Agricultural Seeds; |
| |
(d) |
Water
treatment chemicals; |
| |
(e) |
Certified
grain (maize and wheat/flour); |
| |
(f) |
Agricultural
equipment; and implements |
| |
(g) |
Fuel
(diesel, petrol, Jet A1); |
| |
(h) |
Industrial
chemicals, machinery and spare
parts; |
| |
(i) |
Cement; |
| |
(j) |
Packaging
material; and |
| |
(k) |
Tyres |
| |
(l) |
Coal; |
| |
(m) |
Cooking
Oil; |
| |
(n) |
Salt/Yeast; |
| |
(o) |
Stock
Feeds |
| |
(p) |
Drugs |
Improved availability
of critical imports will also help
shore up capacity utilization and
stabilize both supply and prices.
8 INVESTMENT
BY NON RESIDENT ZIMBABWEANS
In order to ensure participation
by non-resident Zimbabweans in the
Diaspora, and to take advantage of
the benefits promised by the Indigenization
Act, non-resident Zimbabweans are
encouraged to invest in Zimbabwe,
in the form of consortia or as individuals.
Such investments, will
be regarded as foreign investments
for Exchange Control purposes, and
shall be funded from foreign currency
capital (free funds) injected by the
non-resident Zimbabweans in the Diaspora.
All disinvestment
proceeds emanating from investments
by such individuals or consortia shall
with effect from 1 August 2004, be
freely remittable as is the treatment
of all disinvestment proceeds by foreign
investors for post-May 1993 investments.
In addition, such investors will have
an option to receive 100% of their
profits and dividends in foreign currency.
:.
Back |
