Zimbabwe limits dollar sales to foreign payments only

Zimbabwe’s commercial banks are under orders to restrict U.S. dollar transactions to companies and individuals with foreign payments to make, according to a central bank directive that demonstrates the slow progress of currency reforms.

The document, a measure of the foreign exchange controls that remain in place six days after authorities announced moves to ease chronic cash shortages, also states such transactions should be aimed at stimulating economic growth.

It was sent to banks on Friday and seen by Reuters on Tuesday.

Zimbabwe abandoned a discredited 1:1 dollar peg for its dollar-surrogate bond notes and electronic dollars last week, merging them into a lower-value transitional currency called the RTGS dollar.

It launched the RTGS dollar in a “managed float” at 2.5 per U.S. dollar, but as of Tuesday, banks had yet to start selling hard currency in cash.

Banks were only selling U.S. dollars to firms and individuals with invoices or receipts for imports deemed a priority, such as fuel and medicines.

“All interbank market sales to individuals and corporates shall be restricted to funding of external obligations,” and banks should submit dealing reports every two hours, the Reserve Bank of Zimbabwe (RBZ) directive said.

Dealers were encouraged to take steps “to ensure efficient utilisation of foreign currency that is tilted towards the productive sectors of the economy,” it added.

The state-owned Herald newspaper reported that Botswana had offered to lend Zimbabwe $600 million to support its diamond industry and private firms.

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