As reported in our recent article, a lot of businesses seem to have embraced the willing buyer willing seller rate. This is probably because more businesses are able to access foreign currency at this rate compared to the sideshow that is now the RBZ auction. However, there is still the issue that only connected individuals and corporates have thus far been able to access foreign currency at this rate. These individuals keep getting funds while other applicants get rejected. To prevent this the RBZ has set a new limit that will prevent one client from getting more than 10% of the funds from a given dealer.
Below is the full statement from the RBZ:
EXCHANGE CONTROL CIRCULAR NO. 4 OF 2022 TO AUTHORISED DEALERS
ISSUED IN TERMS OF SECTION 35 (1) OF THE EXCHANGE CONTROL REGULATIONS STATUTORY INSTRUMENT 109 OF 1996
Further to the Exchange Control Circular No.3 of 2022 on the Willing-Buyer Willing-Seller exchange rate mechanism, Exchange Control would like to advise Authorised Dealers [read Banks] that the foreign exchange payment framework has been extended to care for foreign payments of up to US$10 000 per week for individuals and corporates including SMEs.
Authorised Dealers should ensure that sales in the interbank are evenly spread to allow wider access of funds to the market. At no point should any single individual or entity access more than 10% of the Authorised Dealer’s pool of funds.
The payments effected under this framework shall continue to be acquitted in the normal manner.
Please be guided accordingly
16 June 2022The full circular from the RBZ
A sensible measure
Given what we have already said above this can be considered to be a sensible measure by any measure. As we have already pointed out, the usefulness of the facility has been hindered greatly by hoarding. Those with connections to a given bank have found it much easier to fulfil their US$10 000 quotas while those who need the facility but have no connections are often turned away empty-handed. This new measure, while still not ensuring fairness will at least see whatever funds a bank has available being spread across more buyers. One thing to note is that this is Zimbabwe, corrupt individuals could always just apply using more shell companies but that does not mean this is a bad law. It will make would-be cheats work harder than they previously had to.