70 percent forex retention returns
Miners and other exporters will now be subjected to foreign currency retention threshold of 70 percent following the success of the auction-based system in improving foreign currency availability for producers.
According to the new monetary policy released by the Reserve Bank of Zimbabwe (RBZ) Governor John Panonetsa Mangudya, all exporters will receive 70 percent of their exports in foreign currency with the remaining transferred into their local ZWL accounts at prevailing exchange rate regardless of their productive sectors.
There has been an outcry on the part of miners particularly gold miners on late payments by the country’s sole gold buyer and exporter, Fidelity Printers and Refiners this move is set to address this challenge.
“Given the positive impact of the auction system in price stability and the need to sustain the auction, all export retention thresholds for all exporters will be at a standard level of 70% with immediate effect,” RBZ said.
For some time now, exporters in productive sectors have been calling for an upward revision of the retention thresholds to allow them to access funds to meet operating expenses.
Gold miners were the first to receive reprieve in May this year after Fidelity Printers and Refineries (FPR), a subsidiary of the RBZ raised the foreign currency retention threshold for gold miners to 70 percent from 55 percent.
There will be losers and winners from the latest development given that the Monetary Policy Committee in June agreed on the following threshold with effect from July 1.
Manufacturers retained 80 percent of their export proceeds; gold producers (55 percent); other minerals (50 percent); tobacco and cotton merchants, for input schemes (80 percent); tobacco growers; 50 percent, cotton growers; 30 percent while horticulture, transport, and tourism would retain (80 percent).
The Bank has also reviewed the liquidation period of unused funds from 30 days to 60 days to give exporters more time to plan their cash-flows.
“In addition to this equity principle on export retention thresholds, the 30 day liquidation period of unused funds has been reviewed upwards to 60 days from the day of receipt of funds. This is essential to enable exporters to better manage and plan their cashflows,” RBZ said.