ZIMBABWE’S central bank will provide 15 percent of the foreign exchange it has available to investors seeking to repatriate proceeds from share sales and dividends.
The allocation is the latest step by the authorities to overhaul its monetary system after a lack of foreign currency caused shortages of basic commodities and spawned the highest inflation rate in a decade.
The Government last month scrapped a quasi-currency known as bond notes and introduced a new unit known as the RTGS dollar.
The shortage of dollars and capital controls have effectively trapped foreign investors’ money in Zimbabwe.
The central bank announced the changes in a circular to authorised dealers on February 22.
“The Reserve Bank has revised the guidelines on utilisation of foreign exchange to accommodate remittance of disinvestment proceeds from sale of shares on the Zimbabwe Stock Exchange,” the bank said.
Inflows to Zimbabwe from stock investors will be converted to RTGS dollars at the interbank rate, it said.
The measure will enable the authorities to reduce a “huge backlog” of foreign-portfolio-investment remittances that has accumulated over the past two years, said Tafadzwa Chinhamo, chief executive officer of the Securities and Exchange Commission of Zimbabwe.
“The new policy will see banks now settling the outstanding payments on a first-in-first-out basis at the obtaining interbank rate,” he said.
“This is a welcome move because it brings clarity to the issue of outstanding FPI payments and how they will be dealt with.”
The central bank also adjusted the threshold on foreign-currency payments to tobacco farmers to 50 percent of net proceeds, from 30 percent of gross sales previously, according to the circular.
Tobacco is the second-biggest generator of foreign-exchange, after mining, and growers are scheduled to begin selling their crop later this month.