RBZ bans Cash In and Out with immediate effect

RBZ bans Cash In and Out with immediate effect
Published: 30 September 2019
The Reserve Bank of Zimbabwe has directed mobile payment system providers and merchants to discontinue cash in and cash out with immediate effect while it has also directed economic agents to discontinue cash back facilities.

This comes as part of efforts to stop the buying and selling of cash through mobile money agents at high rates above the approved charges for cash in and cash out with some economic agents nit banking cash sales under the guise of cash-back services.

At present, there is a premium on bond cash of between 35-40%. Coins are at 25% while the US$ rate is at 9x-10x for bond cash.

Bond coins and bond notes in circulation in the economy account for around 5% of money supply and RBZ governor John Mangudya has in the past said he was exercising restraint on the release of cash into the economy.

Most goods in the shy-town tuckshops are priced much lower than goods in formal retail but most operators transact on a cash only basis.

Analysts believe that commissions which were being earned by people selling cash are seigniorage revenue being foregone by the central bank and is value accruing to private hands. The view is that rather the RBZ gain from the seigniorage through more cash injections than allow private individuals to continue exploiting the imbalance.

Meanwhile, the RBZ has also directed that ZWL settlements at Bureau de changes shall no longer be in cash but through customer bank accounts, electronic accounts and debit cards.  

In addition, BDC's shall not enter into twining arrangements with customers to prefund foreign currency purchases to third parties other than the customer. BDCs shall hold a float of not more than US$20 000 and any excess amounts should be sold to an authorised dealer within 24hours.

In Exchange Control Directive RU131/2019, BDCs will only trade with individuals. Purchases up to US$300 will not require customer identification while sales of forex will only be done to individuals for foreign personal travel only upon submission of a valid passport.

Margins on the interbank have been set at 3% of the med-rate and 5% for BDCs. The central bank also said that all purchases of forex shall only be for funding bona – fide external payments and against accounts that are adequately funded with the respective local currency equivalency.
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