RBZ scraps 15% statutory surrender for grain mille...

RBZ scraps 15% statutory surrender for grain millers and USD debtors

Reserve Bank of Zimbabwe has scrapped statutory surrender requirements on receipts from domestic sales exempting all grain millers and corporates holding US dollar loans from the 15% statutory surrender on domestic sales.

“To enable repayment of foreign currency loans, authorised dealers are advised that corporates with foreign currency loans with banks are exempted from the 15% statutory surrender requirement on domestic sales,” RBZ exchange control director Mr Farai Masendu wrote in directive this week.

This gives relief to local companies that have taken or converted loans into US dollar debt after the central bank hiked the benchmark policy rate from 80 to 200 percent to prevent borrowing for speculative purposes.

“For administrative purposes, authorised dealers are required to submit to Exchange Control schedules of their corporate borrowers that show the name of the borrower, date of loan contraction, amount borrowed, amount repaid to date, amount outstanding and a comment on the performance of the loan.

The RBZ has reduces allocations for key imports at the forex auction to promote the willing-buyer, willing-seller as the main platform for forex price discovery.

This comes after International Monetary Fund teams that visited the country in 2022 recommended liberalisation of foreign exchange.

But volumes on the willing-buyer, willing-seller platforms have remained low driving the black market back into rejuvenation and sending the local currency back into a free fall.

The RBZ move should ease demand for black market currency. The central bank has also indicated that it could hike bank loan interest rated up again to end speculative borrowing.

The bank increased on loans up to 200% last year then reduced it to 140%.