The Reserve Bank of Zimbabwe is finalising discussions with the African Export-Import Bank towards a US$500 million Nostro Stabilisation Guarantee Facility to provide foreign currency account (FCA) holders with assurance that foreign currency shall be available on request.
This was announced by RBZ governor Dr John Mangudya in his mid-term Monetary Policy Statement for 2018 this afternoon.
This comes as the central bank moved to reintroduce FCAs to safeguard investors’ earnings and deposits.
FCAs had been rendered ineffective after the authorities adopted a multi-currency system in 2009.
“With immediate effect, all banks are therefore directed to effectively operationalise the ring-fencing policy on Nostro foreign currency accounts by separating foreign currency accounts (FCAs) into two categories, namely Nostro FCAs and RTGS FCAs.
“As a further support to this measure and to provide credit enhancement or deposit protection for the Nostro FCAs, the Reserve Bank is finalising discussions with the African Export-Import Bank (Afreximbank) towards a US$500 million Nostro Stabilisation Guarantee Facility (NSGF) to provide Nostro FCA holders with assurance that foreign currency shall be available when required by the account holders. The NSGF, which will be similar to the AFTRADES Facility that guarantees interbank trading in Zimbabwe, is targeted to be in place by the end of October 2018,” said Dr Mangudya.
“For the avoidance of doubt, foreign currency in the Nostro FCAs pertains to free funds, diaspora remittances, international organisations’ remittances, portfolio investment inflows, loan proceeds and export retention proceeds,” he said.
“It is also essential to note that all exporters retain 100 percent of their export proceeds with the exception of gold producers that retain 30 percent of export proceeds; platinum, diamonds and chrome 35 percent and; 20 percent for tobacco and cotton producers.”
The Monetary Policy Statement is issued in terms of Section 46 of the Reserve Bank of Zimbabwe Act [Chapter 22:15].
Source – ZBC