Mixed messaging bane for monetary authorities

THE Reserve Bank of Zimbabwe (RBZ) was forced to spring into action last week as it moved to reassure the market that remittances would not be converted into local currency at the point of withdrawal from banks or money transfer agencies.

RBZ deputy director Financial Markets William Manhimanzi had put the cat among the pigeons when he announced that authorities were contemplating to boost the central bank foreign currency coffers by converting remittances to local currency, Zimbabwe Gold (ZiG) at the point of collection.

This led to a public outcry with critics alleging that the central bank was reneging on its policy of treating remittances as free funds which would result in diasporas using informal channels to send money to Zimbabwe to support their families.

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