Reserve Bank of Zimbabwe sets up $70 million facility for foreign payments


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The RBZ said it will reduce banks lending interests rates from 15 percent to 12 percent per annum and also lower charges for use of plastic money.

“Measures to reduce the cost of doing business by reducing lending rates charged by banks from an upper limit of 15% to 12% per annum, and by reducing charges on the use of plastic money to as low as 10 cents for small purchases of $10 and below,” said the bank.

Banks were stable, with core capital at $1.15 billion during the quarter ended 31 December 2016, it added.

As at December 31, 2016, all operating banking institutions were in compliance with the prescribed minimum capital requirements.

The RBZ’s special purpose vehicle, set up to clean up the sector’s bad debts, the Zimbabwe Asset Management Company (Zamco) has so far acquired a total of $812.52 million non-performing loans (NPLs) comprising of $548.66 million proprietary portfolio and managed portfolio of $263.86 million.

The company is expected to clear the remaining NPLs secured by mortgage bonds by end of March.

“After these acquisitions, ZAMCO will stop further acquisitions and focus on resolution and resuscitation. This will curb moral hazard in the banking sector and is a standard practice internationally for all asset management companies formed to resolve NPLs,” said the RBZ.

RBZ said it will revamp the horticulture finance and gold development facility from $20 million to $40 million to promote exports.

The central bank introduced an export incentive scheme in May last year to promote the export of goods and services to enhance inflows of foreign currency. These are paid out in ‘bond notes.’

Gold deliveries to its Fidelity Printers and Refineries unit is seen at 25 tonnes this year from 21.4 tonnes last year while tobacco output is expected to be higher at 215 million kilogrammes after farmer increased the crop hectarage 10 percent to 107 000ha.

However Zimbabwe’s trade deficit improved by nearly 40 percent from $3.3 billion in 2015 to $1.985 billion in 2016 on the back of import control restrictions imposed by the government and tight foreign currency control measures.

“A combination of foreign currency management measures announced by the Bank in May 2016 and import management measures by the Ministry of Industry and Trade, as well as the effect of a stronger U.S. dollar on the country’s terms of trade, in part, explain the declining import bill in 2016,” said the RBZ.- The Source

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Charles Rukuni
The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.

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