RBZ reviews cotton retention percentage

Zim Now Writer

The Reserve Bank of Zimbabwe has revised the foreign currency maintenance threshold for the 2023 cotton marketing season to 85 percent.

It advised the Agricultural Marketing Authority of the new change following the RBZ’s recent Monetary Policy Statement.

The Central Bank said: “Following the Monetary Policy Statement issued on February 2, 2023, we write to inform you that with effect from the 2023 season, cotton growers shall be paid 85 percent of their sales in foreign currency. The remaining balance of 15 percent shall be paid to the grower in local currency through bank transfers at the prevailing interbank market rate.

“Considering this measure, cotton merchants shall drawdown from offshore and sell 15 percent of their proceeds to RBZ at the prevailing interbank rate. The foreign currency payment to cotton farmers shall be net of foreign currency loans accessed for the purpose of financing seed cotton production.”

AMA chief executive, Clever Isaya said the change will encourage farmers who are into cotton farming.

“The increase of the retention threshold to 85 per cent is a positive development and will motivate our farmers to produce more in terms of quantity and quality. As AMA, we welcome this development and the onus is now on farmers to do their part as Government has played its part,” Isaya said.

Prior, cotton farmers have been retaining 75 percent of their foreign currency incomes, with 25 percent being sold to the central bank at the auction rate.