Zimbabwe reduces forex payment backlog by half

During the ongoing selling season, Zimbabwe had recorded tobacco sales amounting to $206 million by April 24.

“As a result of the increased foreign exchange earnings from agriculture and mining and the Nostro stabilisation facility availed by the African Export-Import Bank (Afreximbank), the Bank has, since the second week of April 2017, been able to allocate US$100 million into the national economy on a weekly basis to meet various foreign exchange demands that include essential imports and payments, feedstock for industrial production and discharging outstanding foreign payments obligations,” Mangudya said.

“These supplementary allocations of foreign exchange by the Bank are over and above the US$1.2 billion of foreign exchange made available by banks to the various sectors of the economy during the period January – April 2017.”

Cairo-headquartered Afreximbank, on the other hand, has been one of Zimbabwe’s most consistent international lenders following the country’s isolation by Western capital, offering several facilities running concurrently and disbursing an average $500 million annually since 2009.

“The Bank’s allocations, which are earmarked for funded bank accounts only, have not only significantly reduced the real demand for foreign exchange but have also reduced the foreign payments backlog by more than 50 percent to the current level of US$185 million,” Mangudya said.

The central bank chief said cash deposits at banks and Nostro holdings had also increased by 50 percent to $450 million.

“The US dollar cash deposits and the foreign exchange held in Nostro accounts are over and above the $140 million of bond notes, $23 million bond coins and an estimated US$400-600 million in circulation in the economy,” he said.

Mangudya added that the central bank would continue to enforce the reduction in transaction costs for electronic transactions, which he said currently account for 70 percent of retail payments.- The Source

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