THE Reserve Bank of Zimbabwe has scrapped charges for transactions under US$10 or the equivalent in Zimbabwe Gold (ZiG) in an attempt to encourage digital transactions in the country.
This occurred at a time when the nation is experiencing a cash crisis due to the scarcity of ZiG coins and notes since the new currency was introduced in April this year.
In a Monetary Policy Review Statement yesterday, central bank governor John Mushayavanhu stated that the action was intended to encourage the shift to digital currency.
“To further promote the use of electronic means of payment, the Reserve Bank is, with effect from September 1, 2024, exempting electronic transactions of less than US$10 or the ZiG equivalent from bank charges.
“This measure will remove the cost of using electronic means of payments by making such transactions a near-cash characteristic, consistent with the Reserve Bank’s drive towards digital cash,” Mushayavanhu said.
According to the RBZ boss, the nation has been able to satisfy its demands for foreign exchange after amassing significant amounts through export surrender procedures.
“The favourable foreign currency receipts have boosted the country’s balance of payments position, which is now expected to record a current account surplus for the sixth consecutive year beginning in 2019,” he said.
“Reflecting the strong performance of the country’s balance of payments, the government has been able to mobilise significant foreign currency through the export surrender requirements for intervention and liquefying the foreign exchange market, as well as meeting external foreign currency obligations.”
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Mushayavanhu said the bank was working on a foreign reserves build-up strategy until they are internationally acceptable.
“Given the importance of foreign currency reserves in sustaining the ZiG, the Reserve Bank has a reserves accumulation strategy to ensure adequate foreign reserves are available,” he said in the statement.
“The Reserve Bank will, therefore, remain resolute on its accumulation strategy until the country’s foreign reserves reach internationally acceptable levels.
“The financial sector and the country’s national payment systems have also remained stable and efficient in supporting the smooth operations of ZiG and the country’s development aspirations, as espoused in NDS1 [National Development Strategy 1] and Vision 2030.”
He said in order to fix any potential issues with the economy, the central bank plans to boost the amount of lower ZiG denominations injected into the system.
However, the bank is satisfied by the general acceptance and uptake of ZiG in the economy.
“To ensure increased circulation of ZiG in the economy the following measures will be undertaken: to increase the injection of cash in line with demand while preserving the on-going initiatives to entrench the country’s cash-lite economy; to continue to inject more small ZiG denominations into the economy to ease the problem of change and eliminate the rounding up of prices by businesses,” he said.
In addition, he said the central bank is committed to improving the distribution and circulation of the ZiG through the expansion of the Homelink outlets in rural areas.
According to him, in order to fix any potential issues within the economy, the central bank plans to boost the amount of lower ZiG denominations injected into the system.
