Harare — THERE are several reasons why people with relatives abroad should encourage them to use money transfer agencies that operate under the Homelink umbrella.

Using money transfer agencies is the safest and most reliable means of sending the money. It is fast. It should not take longer than 24 hours at the most and often takes no more than 10 minutes, depending on the agency used.

Sending money through legitimate money transfer agencies also helps the country. The money is paid in Zimbabwe dollars and the foreign currency is made available to the foreign currency auction, where much of the currency bid for is used for essential imports for the manufacturing sector, including companies that export their finished products and so earn the country foreign currency.

A good rate is paid for foreign currency sent through the Homelink network of money transfer agencies. The rate used for calculating the payment in Zimbabwe dollars is $5 600 to the US dollar or the auction rate, whichever is the higher. The rate to the British pound or to other currencies is calculated on the basis of the rate of the US dollar to the pound or other currency.

It is true that it might be possible to obtain a slightly higher rate using the illegal black market or so-called parallel market. However, is it worth acting illegally and taking the risks involved in black market transactions for the sake of obtaining slightly more money, knowing that by doing so one is depriving the foreign currency auction and hence the country of much-needed foreign currency?

Introduction of the foreign currency auction was a major factor in stabilising prices. Nobody who wants to see greater price stability and a turnaround in the economy would want to fuel inflation by contributing to the black market and depriving the foreign currency auction of the foreign currency it needs in order to meet the requirements of the productive sector.

By using the legitimate money transfer channels, Zimbabweans at home and abroad can contribute to the country's economic turnaround and eventual economic prosperity.

Using the Homelink system gives senders and receivers peace of mind. They do not have to worry about possibly losing the money or wondering how long it will take to reach recipients.

The black market is fed, of course, by those who turn to it for foreign currency because they are unable to obtain it at the auction or believe they would be unable to obtain it there. It was to prevent people having to turn to illegal markets for holiday allowances, for instance, that the Reserve Bank initially allowed recipients of money from abroad to receive it in foreign currency if they wished.

When it became necessary to rescind this privilege as a result of its being abused by people who received the money in foreign currency and then sold it on the black market, the Reserve Bank introduced a mini-auction specifically for holiday allowances, school fees and informal trading purposes. It is now possible, therefore, to obtain relatively small amounts of foreign currency for purposes that it was previously not available for.

As with the larger auctions, applications and bids are made through commercial banks.

lNext week we will look at foreign money transfer agencies and the sort of factors to be taken into consideration by Zimbabweans abroad when deciding which agencies to use to send money home, kumusha, ekhaya.

lIf you have any questions you would like addressed in this column or any suggestions, send them by e-mail to mhpr@mhpr.co.zw or by post to Box MP97, Mount Pleasant, Harare.