We make reference to Directive RY002/2023 issued by the Reserve Bank of Zimbabwe on 3 February 2023 following the Monetary Policy Statement issued by the Governor on 2 February 2023. Please find the highlights below:
Review of Interest rates effective 1 February 2023
- The Bank policy rate has been reduced from 200% to 150% per annum to align with the inflation outlook.
- The Medium-term Bank Accommodation (MBA) Facility lending rate for the productive sectors, including individuals and MSMEs, has been reduced from 100% to 75% per annum.
- The prevailing Bank policy rate has been maintained as the minimum lending rate for all banks.
- Minimum deposit rates on savings and time deposits are adjusted to 30% and 50% per annum, respectively.
- Minimum deposit interest rates on FCA savings and time deposits are maintained at 1% and 2.5% per annum, respectively.
Increasing and standardising retentions on exports receipts and Domestic Sales in Foreign Currency effective 6 February 2023
- Export retentions have been increased and standardised at 75% across all sectors, including firms listed on the Victoria Falls Stock Exchange (VFEX).
- The Incremental export incentive scheme has been discontinued.
- Foreign currency retention on domestic sales in foreign currency has been increased to 85% from 80% for qualifying entities.
- The exportable amount of foreign currency cash and gold coins has been reviewed upwards from US$5,000 to a maximum of US$10,000 (Either as cash or coins equivalent only or a combination of both).
- The maximum amount of local currency notes and coins that may be taken out of the country is an equivalent of USD$1,000 using the prevailing interbank exchange rate.
- Exporters with overdue export receipts are now entitled to retain 50% of their export receipts and liquidate the balance into local currency at the prevailing WBWS exchange rate.
- The amount of demonetised notes that can be exported has been limited to not more than 100 pieces of each denomination.
Cancellation of Dispensations on Surrender Requirements
All existing dispensations for retentions of export proceeds above the statutory surrender requirements are no longer applicable effective 06 February 2023. Similarly, the dispensations that applied to corporates with domestic loans to retain 100% of their domestic sale proceeds, shall no longer be applicable with effect from 06 February 2023.
Foreign Currency Retentions by Tobacco and Cotton Growers
With effect from the 2023 tobacco and cotton marketing season, tobacco and cotton growers shall be paid 85% of their sale proceeds in foreign currency. The remaining balance of 15% shall be paid to the grower at the prevailing interbank market rate. Tobacco and cotton merchants shall drawdown from offshore and sell 15% of the proceeds to the Reserve Bank at the prevailing interbank market rate. The foreign currency payment by tobacco and cotton merchants to growers shall be net of the foreign currency loans accessed for the purpose of financing tobacco production. Foreign currency sale proceeds for tobacco and cotton growers shall continue to be treated as free funds.
Treatment of Overdue Export Proceeds
With effect from 06 February 2023, 50% of the overdue export proceeds shall be sold to the Reserve Bank at the prevailing interbank market rate, being a reduction from 100% which was previously applicable.
With regards to the Willing Buyer Willing Seller (WBWS) and the RBZ Auctions, clients are reminded that it is not permissible to raise the same payment instructions for participation on both the WBWS platform and the RBZ auction concurrently.
