By Alois Vinga
THE Reserve Bank of Zimbabwe (RBZ) has issued additional exchange control regulations which have categorised all foreign currency held by Non-Governmental Organisations (NGOs) and embassies as “free funds” which can be used to finance local contracts.
Through the Central Bank’s circular 8 of 2019 released Wednesday, the funds should however be liquidated through prevailing interbank rates when withdrawn for local use.
Organisations falling under the specified categories have been granted the greenlight to continue to receive and retain their foreign currency in their Nostro accounts and to pay salaries to their employees in their chosen currency.
“In cases where the cash transfers are paid in foreign currency, the final beneficiary is required to convert the foreign currency cash to local currency at the prevailing interbank rates,” the notice said.
The same discretion has been applied on to the transfer of grants and donations.
According to the notice, an opportunity to apply for the provision of bulk local currency needed for use in carrying out local transactions has been availed to NGOs and will be facilitated through a formal application written to the central bank.
Diplomatic missions in the country have also been allowed to continue charging Visa fees in foreign currency and a window for their employees to send money back to their families in their respective countries of origin has been granted.
Bureaux de Change have been granted permission to sell foreign currency to those in need of tuition, medical and subscription fees on a willing seller, willing buyer basis after verifying relevant support documents.
Institutions trading foreign currency have been directed not to sell and buy money exceeding US$500 from individuals while small to medium enterprises have been capped at US$2 000.
The Central Bank also granted Bureaux de Change up to December 31 2019 to deposit the minimum capital requirement of US$15 000 or its equivalent at the prevailing interbank rates into the RBZ.
“The amount of foreign currency that can be sold to an individual for personal travel/holiday allowance shall be equivalent to US$300 per day and up to a maximum of seven days per travel up to an equivalent of US$10 000 per year,” the notice added.