Monetary and fiscal policies are so mercurial in Zimbabwe – constantly ever-changing! It is often hard to keep track as virtually almost every week some new policy or directive is enacted. On the 27th of August 2021, there was a monetary policy committee was held. There a couple of notable things agreed on one of which read as the following, “Further liberalising the operations of bureaux de change to promote financial inclusion by allowing them to process small value foreign currency transactions of up to US$50 per person per week based on individual identities, with charges and commissions levied by the bureaux de change not exceeding 10% per transaction.”
Later on, a list was published of licensed Bureaux De Changes – 74 of them in total. These were places from which people could access the weekly US$50 facility. The facility ran for several months without literally being able to access the facility. Almost 7 months in the government has decided to review the facility. This comes after growing concerns over abuse of the facility.
Not Everyone Can Access The Weekly US$50 Anymore
2022 Monetary Policy Statement By Dr Mangudya (RBZ Governor)
The governor in his statement cited some concerns regarding the weekly US$50 facility. His remarks were as follows:
“The bank availed the US$50 facility to assist members of the public to access foreign currency for small domestic purchases and payments at the official exchange rate through bureaux de change which are allowed to charge up to 10 percent over the cost of funds. The bank has, however, noted with concern the abuses of this facility by some members of the public. In this regard, the bank is refining the US$50 facility, with immediate effect, to limit it to the vulnerable members of the society that is PENSIONERS, SENIOR CITIZENS, PEOPLE LIVING WITH DISABILITY, and those requiring FOREX FOR MEDICAL PURPOSES.”
Mixed Reactions To The New Development
There are two sides of a coin and so it is with this new development. There is a side that has welcomed this new development citing it will decongest bureaux de changes. These are remarks of people eligible under the new framework. On the other side, some feel this new development can have undesirable consequences on the parallel market. If fewer people can access the weekly US$50 facility this means more people will go to the parallel market. This in due course can cause upheavals that can result in spikes in inflation.
Some feel that regardless, the amount is still too low to cater for a week’s needs. Thus they wish the amount could be increased; though I feel that can be a recipe for disaster. Anyways, yes, the RBZ has revised the weekly US$50 facility. The question is, is this going to address the issue of corruption or abuses of the facility that were rampant. Knowing Zimbabwe and learning from the past, there are always loopholes that can be capitalized on. Let us see how things pan out over time.