FCA's
New measures enable funds recipients to open FCAs

The new measures introduced by the Reserve Bank of Zimbabwe to facilitate the transfer of funds back home by Zimbabweans living abroad have radically altered the position of individual Zimbabweans in relation to foreign currency.

They are now not only able to receive money from abroad but can choose to be paid the money in foreign currency rather than in local currency, if they wish.

Most people want to receive their money in local currency, because local currency is more use to them than foreign currency. Payment for goods and services in Zimbabwe, according to Reserve Bank legislation, should be in the legal currency of tender, which is the Zimbabwe dollar.

However those who want to be paid their money from abroad in foreign currency can do so.

Funds transferred to Zimbabweans at home through the new Homelink money transfer system are not subject to Exchange Control Regulations

Those who choose to be paid in foreign currency, can legitimately keep the foreign currency for as long as they like. They can even open a foreign currency account. If they wish, they can use the foreign currency to pay for their foreign travel or holiday.

Individuals who have foreign currency, no matter how they acquired it, can change the money at a bank at the same rate as is applied to money transferred from the Diaspora without any questions being asked as to where it came from.

The change has been brought about largely by the Reserve Bank’s decision to declare remittances from abroad “free funds”, explained Exchange Control Division chief Moris Mpofu.

“The mechanism to transfer funds from the Diaspora is aimed at facilitating remittances of funds by non-resident Zimbabweans in a more efficient and less risky manner.

“Such remittances are treated as ‘free funds’ and as such are not subject to Exchange Control Regulations,” he said.

“The recipient can choose whether to be paid in foreign currency or local currency. If he or she wishes to be paid in local currency, then the exchange rate that is used is the foreign currency auction rate, which is determined through auctions conducted by the Currency Exchange twice a week, or the Diaspora floor rate of $5 200 to the US dollar, whichever is higher.”

No commissions are levied on money paid out by a registered local Money Transfer Agency whether the money is paid out in local or foreign currency. The Reserve Bank has made this possible by instead paying an agency fee to Money Transfer Agencies (MTAs) for every dollar in foreign currency they deliver to it, Mr Mpofu said.

Commissions and charges would, however, continue to be levied on the sender by the foreign partners of local MTAs in line with international practice.

The choice of whether to be paid in local or foreign currency, he emphasised, was the prerogative of the sender and receiver. Recipients could also opt to be paid in traveller’s cheques or, if they were dealing with a bank MTA, through a bank draft.

Mr Mpofu said recipients could opt to open a foreign currency account and have their funds credited to this account.