Reserve Bank Zimbabwe offers 10 percent sweetener for diaspora remittances

The Reserve Bank of Zimbabwe (RBZ) has increased the Diaspora Remittance Incentive Scheme (DRIS) from 3 percent to 10 percent, in a bid to increase inflows.

Remittance constitute 28 percent of the $2.8 billion in foreign currency receipts between January and June according to governor John Mangudya in an earlier presentation, $784 million compared to $140 million in foreign direct investment (FDI) and $224 million in the form of external loans.

In his mid-term monetary policy statement, Mangudya said although the scheme had attracted international remittances to flow through the banking system, informal remittances remained high.

The remittances market has a high appetite for cash since the majority of recipients are not banked, he added.

“In order to enhance financial inclusion for remittances recipients, the Bank shall increase the DRIS for remittances received through banking or wallet accounts from 3 percent to 10 percent, with effect from August 2017,” Mangudya said.

However, the incentive for money transfer agencies and remittances received as cash remain unchanged at 2 percent and 3 percent, respectively.

Mangudya said the central bank recognises Diaspora remittances as a key and reliable source of liquidity for the country and will continue to find ways to improve the remittances market.

Last year, Diaspora remittances declined by 17 percent to $779 million from $939 million in the previous year, attributable to the poor performance of the global economy, the depreciation of the South African Rand (South Africa contributes about 34 percent) and the increasing preference of the Diaspora to send remittances in kind and through informal channels. –The Source

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