Zimbabwe: Govt Gazettes Free Forex Funds Sigovt Gazettes Free Forex Funds Si

31 March 2020

Government has gazetted the amended statutory instrument allowing the wider use of foreign currency in the country.

This follows the fixing of the official exchange rate to US$1:$25 by the Reserve Bank of Zimbabwe (RBZ) last week.

The amended Statutory Instrument, Exchange Control (Exclusive Use of Zimbabwe Dollar for Domestic Transactions) (Amendment) regulations, 2020 now captures payment for goods and services using free funds.

"In this section, free funds bear the meaning given to that term in Statutory Instrument 109 of 1996, and includes funds lawfully held or earned in foreign currency by any person. Not withstanding these regulations, any person may pay for goods and services chargeable in Zimbabwe dollars, in foreign currency using his or her free funds at the ruling rate on the date of payment," reads part of the SI.

It further says the payments can be done electronically through a foreign currency account or in cash or through any electronic payment platform.

Regulations banning compulsory forex payments, however, remain in force.

To provide further relief to the public, the RBZ agreed with banks to suspend increases in charges for all electronic payments during the emergency and was now engaging mobile network providers to reduce their charges to promote electronic banking.

RBZ Governor Dr John Mangudya said that the measures were part of Government interventions, in line with President Mnangagwa's call on Monday for measures to mitigate the impact of Covid-19 on Zimbabwe.

Dr Mangudya said the bank had made available an option to use free funds to pay for goods and services chargeable in local currency, taking into account limited forex resources negatively affecting balance of payments.

"The dispensation to use free funds will not only make payment for goods and services easier, but will also promote social distancing as banks will be able to provide digital financial services to their customers that include producers of gold, tobacco and cotton and recipients of diaspora remittances."

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