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StanBIC Bank Group took a R2,1 billion exchange loss from its Zimbabwean-based operations, Stanbic Bank, after Government made changes to the country’s functional currency.
In February this year the Reserve Bank of Zimbabwe (RBZ) implemented certain key monetary policy measures with the most significant change being the establishment of a new foreign interbank market.
The establishment of this interbank market has meant that assets, which were long held as US dollar assets now have to assume local currency status.
Such a move has, however, meant loss of value as the Zimbabwean dollar has been losing value from a parity of 1:1 since 2016 to an exchange rate of US$1 to 6,6 Zimbabwean dollars at the close of the financial period to June 30, 2019.
As a result, Standard Bank group said it had recorded a R2,1 billion in foreign currency reserve loss.
“As at June 30, 2019, this rate had deteriorated to 6,6 RTGS: USD from 1 RTGS:USD as at December 31, 2018, which resulted in a foreign currency translation reserve (FCTR) loss of R2,1 billion for the group,” said Standard in a statement accompanying its results for the half year to
June 2019.
The banking group said the devaluing local currency and electricity shortages had “further exacerbated a difficult operating environment”.
“The environment in Zimbabwe is expected to remain constrained,” it
said.
Online Reporter