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Zvamaida Murwira
Senior Reporter
The Reserve Bank of Zimbabwe (RBZ) has gazetted the reduction from US$10 000 to US$2 000 the amount of foreign currency an individual can take outside the country as part of measures to rationalise outflow of the hard currency.
Gazetting of the regulations by the RBZ Governor, Dr John Mushayavanhu is meant to give legal force and effect to the measures that the central bank monetary policy committee announced recently.
The announcement by the central bank was made in terms of Section 40 of the Exchange Control Regulations and was done with the approval of Finance, Economic Development and Investment Promotion Professor Mthuli Ncube
“The amount of foreign currency that a person who is about to leave Zimbabwe may possess, without authorisation in terms of Section 22 of the Exchange Control Regulations, 1996, Statutory Instrument 109 of 1996, in the departure or transit lounge of an airport or other port of entry or exit, shall be a total of two thousand United States dollars or its equivalent in any other currency or combination of currencies,” reads the notice.
The decision to rationalise the foreign currency outflow is expected to stabilise exchange rates, stimulate growth and contain inflation among other macro and micro economic fundamentals.
The RBZ also announced a cocktail of measures that it said were meant to promote growth and help the economy maintain a positive trajectory.
One of the fundamental measures was to liberalise the exchange rate, which saw the central bank effectively devaluing the local currency, the Zimbabwe Gold (ZiG), for the first time since its adoption in April, while tightening the screws on loans by raising the bank lending rate from 20 percent to 35 percent with immediate effect.
The decision was described as a strategic move aimed at stabilising the local currency and easing inflationary pressures, as it adjusted the ZiG exchange rate against the United States dollar by 42,55 percent.
This marks the first official adjustment of the ZiG exchange rate since the currency’s introduction in April this year, with the central bank setting the new exchange rate at ZiG 24,3902 per US dollar, a sharp increase from the previous trading range of ZiG13,6 to ZiG14 per dollar.
The decision is intended to alleviate mounting pressure on the foreign currency market and curb inflation, which has been a persistent challenge in recent months.
The exchange rate adjustment came in response to rising parallel market exchange rates and the surge in demand for foreign currency, particularly US dollars.
The ZiG downslide against the greenback had started to pose pricing challenges for retailers, causing distortions that pushed prices higher both in US dollars and the local currency.
This tipped the scale of competitiveness in favour of informal traders, the majority of whom do not pay any taxes to the Government, despite moving huge volumes of goods and groceries in US dollar cash.
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