There were a lot of confusing things in Statutory Instrument 142 of 2019 which was gazetted on Monday and essentially scrapped the multicurrency system we had relied on since 2009 when we ditched the old Zim dollar.

For example will people be still allowed to demand to be paid in USD or any other foreign currency? What was going to happen to our FCA domestic accounts? Well the RBZ has published a directive which provides answers to these questions.

Will locals still be allowed to demand foreign currency?

No. All local transactions have to be completed in RTGS. The directive closes that gap.

Can you mark prices in USD or any other foreign currency?

The directive says you cannot. What it means is that internaly as management you can peg your prices to USD bases and adjust the prices of your wares in RTGS but you cannot tell people how much in USD your product costs as you are not supposed to accept it.

Is it illegal to have foreign currency on your person?

No. It will probably never ever be illegal to have USD. There are still legitimate sources of USD.

Are diaspora remittances going to be forcibly converted to RTGS?

Not yet. This is an important source of foreign currency to the government so they are wary of jeopardising it. Zimbabwe gets around $1 billion dollars in foreign currency via official remittance channels alone. That will dry up pretty quickly.

Is duty on motor vehicles now payable in RTGS?

Nope, they still want you to pay in forex. The fairy tale is that all this measures will make it easier to get foreign currency at the interbank rate. So if you have RTGS you can approach your bank who will give you Forex at the prevailing rate. Do not worry, your bank will probably never give you any foreign currency to waste on cars, there is still a foreign currency shortage.

Can I pay DSTV in RTGS?

It’s not yet clear how this is going to work. DSTV will probably get a waiver where they can ask for payment in USD or people will have to resort to the black market but given the measures above and powercuts we are going through they are going to see a shocking drop in the number of Zimbabwean subscribers.

Or maybe banks will start processing these payments in RTGS at prevailing intermarket rates.

Will the black market survive these measures?

Yes. The government and banks will now be in charge of forex allocations this shuts the door to most informal traders who form the bulk of Zimbabwe’s businesses. For them it’s either they go to the black market and they die.

What’s going to happen to FCA Nostro Accounts?

People were sceptical when these were introduced and the new measures prove them right. Domestic FCA Nostro accounts are going to be closed. You can no longer make local Nostro transfers. Money has to be converted RTGS first.

You can still make international payments from your International Nostro Account, however, you can be sure as soon as the government runs out of money it will come for the funds in those accounts as well.

Also, you can no longer withdraw USD from Nostro accounts, if you want funds locally you have to convert that into RTGS at prevailing rates.

Dowload the directive

There are many other provisions in this directive you can download the copy here.

Get more scholarly news updates and tips