eBusiness Weekly
Tawanda Musarurwa
The Reserve Bank of Zimbabwe (RBZ) has said will not alter its policy on free funds.
‘Free funds’ basically refers to foreign currency received by individuals, international organisations, non-governmental organisations (NGOs) and embassies.
Presenting the 2020 Monetary Policy Statement (MPS) today, RBZ governor Dr John Mangudya said:
“The bank would therefore like to reassure all holders of free funds that their funds are very safe and secure in Zimbabwe. The same is true for all other foreign currency accounts and that the current export retentions are being maintained at their current levels.
“The bank has therefore no appetite at all to temper with the legal status of the public’s foreign currency accounts.
“Allowing the use of free funds within the national economy for the payment of customs duties on selected products, paying for emergency passports, procurement of basic commodities such as food items and fuel, under the direct fuel (DFI) scheme, should not be misconstrued as going back to dollarisation, but rather, as common good for the country to promote the inflow of free funds from the diaspora and necessary to buttress the confidence that is needed under the de-dollarisation process.”
The maintenance of the policy on free funds means that, for instance, the employees of International Organisations, Non-Governmental Organisations and Embassies will continue to receive their salaries in foreign currency in individual Nostro FCAs at the discretion of their employers.
Such free funds may be retained in the Nostro FCA for an indefinite period and cash withdrawals remain permissible.
And holders of such funds may liquidate cash withdrawn from their accounts, or their account balances into local currency through a bank or bureau de change to fund domestic transactions.
With regards to exporting entities, export receipts shall continue to be received through normal banking channels.
Funds generated from exports shall continue to be administered in line with policies governing exports proceeds which include settlement of bona fide foreign payments and liquidation on the interbank market of all unutilised balances after 30 days from date of receipt.
“Free funds play a catalytic role in enhancing confidence in the foreign exchange market and in promoting economic development. They constitute around 30 percent of Zimbabwe’s total export receipts,” said Dr Mangudya.
