The Reserve Bank of Zimbabwe on Tuesday lifted its ban on third-country foreign payments by banks. The country’s apex bank had previously introduced the ban on Monday, in one of the moves to urgently address the depreciating value of the local currency. The lifting of the ban comes barely twenty-four hours after it was first announced. At the time of the ban, the RBZ listed a number of exemptions that included payments for fuel and basic food items.
A fortnight ago, the country placed a ban on banks, prohibiting them from lending activities in a bid to prevent the excess demand for US dollars and stabilize the Zimbabwean dollar. As of press time, that ban has also been lifted, albeit temporarily. Prior to now, Zimbabwe had been on course to winning the war against hyperinflation, despite decades of mismanagement by previous administrations and sanctions imposed by Western countries. Business Edge takes a look at Zimbabwe’s lifting of the ban on third-country foreign payment and what it means for its economic recovery and potential for growth, as well as implications for individuals and corporate bodies. Tolulope Adeleru-Balogun is joined by Denford Mutashu, president of the Confederation of Zimbabwe Retailers.
“The fight has been taken to those who are stoking inflation as well as volatile exchange rate across the economy,” says Denford Mutashu of the ban on lending and the eventual lifting by the Reserve Bank. He explains further that the government is taking a measured approach to plugging the unfair opportunities that speculators have had in the past.
He adds as well that was the ban on third-country foreign payments kept in place, it would have affected the generality of business in Zimbabwe. “Remember that Zimbabwe is under sanctions and those sanctions would have made it difficult to effect foreign payments. There are routes that businesses used in setting their obligations outside Zimbabwe.”