Chronicle Editor
Oliver Kazunga/Natasha Chamba, Business Reporters
THE Confederation of Zimbabwe Industries (CZI) has welcomed the upgrading of the Real Time Gross Settlement platform to include the United States dollar saying this will allow Nostro account inter-bank transactions which previously have been non-existent.
On Monday, the Reserve Bank of Zimbabwe (RBZ) announced that the upgrading of the RTGS platform to include the United States dollar was aimed at facilitating payments of the greenback Nostro account transactions.
The new policy comes into effect on February 1.
Speaking by telephone from Harare yesterday, CZI president Mr Sifelani Jabangwe said the upgrading of the RTGS platform would go a long way in promoting flexibility as clients involved in Nostro account transactions would now allow inter-bank transfers.
“Previously with the Nostro account transactions we would only make transfers on transactions within the same bank.
“For example, if we were all banking with one institution, we could transfer the Nostros but this has now added flexibility which is helping to facilitate inter-bank transactions,” he said.
A Nostro account is a bank account held in a foreign country by a domestic bank mainly to facilitate settlement of exchange and trade transactions.
In a circular to RTGS participants, RBZ deputy director for financial markets division-National Payment Systems Mr Josephat Mutepfa advised that the RTGS platform had been upgraded to include the greenback in order to facilitate the settlement of US Nostro Foreign Currency Account transactions.
In the past, CZI has raised concerns over the broadening gap between the demand for foreign currency and the amount that was available to facilitate international payments.
Against this background, local banking institutions have come under fire from manufacturing firms for failing to meet manufacturers’ obligations leading to a shortage of raw materials locally.
Mr Jabangwe said although the upgrading of the RTGS platform was a step in the right direction, this was not exactly what industry was craving for.
“What we want is a currency trading platform where those (industries) that require foreign currency will be able to get it at 1:1. However, we believe what the Central Bank has done is a very positive step towards establishing a currency trading platform.
“We wait to see how the RBZ intends to recommend its (currency trading platform) utilisation,” he said.
Economic analyst Mr Persistence Gwanyanya said the upgrading of the RTGS platform to incorporate the US dollar signals a movement towards currency reforms and re-dollarisation.
“This move is a landmark decision aimed at responding to industry’s calls to do something about the currency and obviously it will be easy for industry to make payments in US$,” he said.
Mr Gwanyanya also hinted this might also signal the resuscitation of the forex interbank market.
Another economist Mr Dominic Jairos said the decision by RBZ was aimed at improving US$ liquidity and reducing the need for cash in the economy.
“Business at the moment is operating on a cash basis by withdrawing cash and make physical deposits and that is limiting liquidity of the US$ and increasing the need for physical cash.
“This (latest move) is significant in taming the need for cash,” he said.
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