President Mnangagwa’s few months into office are remembered for exposing individuals and companies who were engaged in forex externalization, something which is (was) badly affecting the economy. With the presentation of the Monetary Policy Statement yesterday, the central bank introduced ways to help curtail the further externalization of funds. In the Monetary Policy Statement, RBZ said;
In order to minimize incidents of externalization of foreign currency, the following measures, which are in line with international best practice, have been put in place for banks and the banking public to adhere to:
(i) Use of Letters of Credit (LCs) for high value transactions.
(ii) All imports to be supported by invoices whose banking details match with
the payee’s name and bank account details.
(iii) Strict adherence by banks to customer due diligence (CDD).
(iv) Export proceeds to be remitted on a timely basis in line with existing rules
The drain in forex through externalization was (is) happening at a time when the country needs forex the most to manage its balance of payments. We just have to see if these measures are even enough to deter the perpetrators of forex externalization.
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