RBZ laments financial indiscipline

RBZ laments financial indiscipline
Published: 25 November 2017
THE Reserve Bank of Zimbabwe (RBZ) says rampant financial indiscipline in the market has resulted in some foreign currency generated from export earnings being unaccounted for.

About 60 percent of the country's forex comes from exports of different products, mainly raw commodities, while 27 percent comes from Diaspora remittances with a balance coming from Foreign Direct Investment and external loans.

The country has generated at least $4 billion in foreign currency receipts as at the end of September this year and the apex bank says it only retains 30 percent of that money.

RBZ deputy director international banking and portfolio management, Mr Ernest Matiza, accused the local financial sector of indiscipline and failing to account for 70 percent of the forex inflows.

"Of that $4 billion, 30 percent is what comes to the central bank in terms of the surrender requirements. Save for the mining  and tobacco sectors, all the other sectors generate their own exchange and the RBZ does not ask you to surrender anything," he said.

"What has surprised us is that we have seen the 30 percent by the central bank being the only forex driving the economy rather than the other 70 percent, which remains with the banks.

"So what we have seen is the indiscipline in the utilisation of that forex with the banks because we can't have an impact in the economy coming from the 30 percent and not the 70 percent."

Mr Matiza's sentiments come as business has been forced to go to the black market to source for forex, a development which has resulted in recent price hikes and a three tier pricing system. Zimbabwe National Chamber of Commerce vice president Mr Julian Mashavakure said accessing forex from banks was difficult as some companies have to wait for up to six months to get their allocations.

"Companies have to wait up to six months even over a year to access foreign currency from the banks. It then becomes a problem, which forces companies to deal with middleman whose pricing for the money is very expensive. The overall effect is that it impacts on the product costing," said Mr Mashavakure.
- online
Tags: RBZ,

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