HARARE – Exporters, especially in the mining sector, have been losing out on foreign currency earnings due to the gap between the official and black market exchange rates, Reserve Bank of Zimbabwe (RBZ) governor John Mangudya has said.
Speaking at the Chamber of Mines annual conference in Victoria Falls last week, Mangudya said the central bank was trying to reduce the “implicit tax” on the exporters’ surrender portion by refining the foreign currency auction market to a true Dutch system.
The term “implicit tax” refers to an indirect cost that results from a Government policy.
In February, the RBZ increased the export retention thresholds from 60 to 75 percent across all sectors of the economy, with the balance paid at the prevailing exchange rate.
The mining sector contributed 75 percent of the country’s total exports in 2021 and 2022.
Finance and Economic Development Minister Prof Mthuli Ncube announced policy measures this week to stabilise the economy and the exchange rate, which include full implementation of the real Dutch Auction System, timely payment and notification of funds available in advance, and selecting the highest bidder.
The weekly auction will now be limited to US$5 million.
On Tuesday, Zimbabwe’s currency weakened almost 36,4 percent against the US dollar on the official market, while analysts said this would lead to the “near or full convergence” of the official and parallel market rates.
Mangudya said the RBZ’s monetary policy stance aimed to ensure that exporters get fair value for their exports.
He also said that the Treasury will now take full responsibility for funding foreign currency surrendered by exporters and use it to service external loans.
The RBZ has been paying an average of US$60 million monthly on external loans. At the current exchange rate, the Treasury will need at least $150 billion to pay foreign creditors.
