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Friday, January 27, 2023
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RBZ to review forex retention on exports and domestic FCAs

Article by Stanley James, Business Editor

The Reserve Bank of Zimbabwe (RBZ) is set to review the foreign currency retention thresholds on exports and local Foreign Currency Accounts (FCA) to consolidate gains in external currency inflows.

The move comes at a time when exporters are retaining 60 per cent of their foreign currency earnings with 40 per cent being sold to the Central Bank at the prevailing official rates.

Twenty per cent of local Foreign Currency Accounts (FCA) deposits is also being sold at official rates.

However, the RBZ Monetary Policy Committee (MPC) which met over the weekend has resolved to review the thresholds next year to boost foreign currency receipts.

The MPC, which is chaired by the Central Bank Governor, Dr John Mangudya, also reveals that interest rates will remain at 200 per cent per year subject to review in 2023.

For economists, the central bank is sticking to the path of a tight monetary policy system.

“The moves are also designed to guard against the shocks that might prevail remember the nation has been enjoying a stable macro-economic climate and it is necessary to consolidate such gains by tightening circulation of money,” Dr Zack Murerwa, an economist.

Another economist, Dr Nyasha Kaseke, noted, “The review of the thresholds is really critical in sustaining the current economic gains and it is, therefore, an important element that needs to be hailed in line with the current stable macro-economic conditions.”

The MPC is expecting the economy to grow by four per cent next year with inflation being projected at below three per cent per month throughout 2023.

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