RBZ secures US$150m to stabilise nostro accounts

13 Nov, 2016 - 00:11 0 Views
RBZ secures US$150m  to stabilise nostro accounts RBZ building in HARARE

The Sunday Mail

Africa Moyo —
THE Reserve Bank of Zimbabwe (RBZ) secured a US$150 million nostro stabilisation facility a fortnight ago that will help companies, particularly those in the manufacturing sector, to remit payments for critical goods and services. In essence, replenishing nostro accounts allows companies to make seamless payments to foreign suppliers.

Nostro accounts are accounts held in a foreign country or foreign bank on behalf of local banks and are used to facilitate foreign exchange and trade transactions. Of late, manufacturing companies and fuel retailers have been experiencing bottlenecks in accessing raw materials and products from suppliers.

RBZ Governor Dr John Mangudya said the money will however be used for fuel, raw materials and other productive inputs.

“We have already brought US$150 million to shore up nostro positions, as we had advised in the mid-term Monetary Policy Statement.

“The money that we are bringing is for imports: fuel and raw materials — productive inputs.

“The money would be used by banks to meet their customers’ requirements,” he said.

Dr Mangudya announced on September 15, 2016 the central bank had arranged for US$215 million in stabilisation facilities from international financiers.

Econet Wireless Zimbabwe (EWZ), the country’s biggest mobile telecommunications company by subscribers and assets, reported in its recent interim financials that its ability to meet some of its “US dollar denominated commitments” to creditors had been caused by nostro funding constraints.

Similarly, Delta Corporation, a unit of Belgium-based AB InBev, reported Thursday that the commissioning of its new Chibuku Super plants in Masvingo and Kwekwe will be delayed due to challenges in paying foreign suppliers.

It is a microcosm of a bigger problem that is affecting local industry, especially at a crucial time when the local market has been opened up due to restrictions on imports on selected goods.

Experts say under normal circumstances, a certain proportion of funds held under the Real Time Gross Settlement (RTGS) should be supported by funds in nostro accounts at a level that is equal to the import dependence ratio.

Zimbabwe’s import dependence ratio is about 45 percent and the nostro position to support the RTGS position of US$1 billion would have to be US$450 million.

According to statistics from the RBZ, local commercial banks held US$156,9 million in nostro accounts by the end of August. The central bank had said US$150 million of the nostro stabilisation facilities would come from the Africa Export-Import Bank (Afreximbank) at rates of under 7 percent, with US$65 million coming from Swiss bank. Dr Mangudya said the US$150 million brought into the country came from the Egypt-headquartered Afreximbank.

As the RBZ seeks to push for increased production to ensure more liquidity in the country, Dr Mangudya also announced in September that the move to raise US$330 million from regional sources had reached an advanced stage.

In May 2016, the central bank unveiled a bonus scheme where 5 percent will be paid to small-scale gold producers and tobacco farmers as a deliberate move to stimulate production. Large-scale exporters are however entitled to 2 percent from the facility. In essence, replenishing nostro accounts allows companies to make seamless payments to foreign suppliers. Of late

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