Exchange controls in Zimbabwe date back to the pre-independence era. In fact, a tight and stringent Exchange Control system was introduced during the Unilateral Declaration of Independence UDI period to alleviate possible Balance of Payments problems due to economic sanctions.
After independence, between the period and , Zimbabwe sustained policies aimed at suppressing imports to assist in the maintenance of external Balance of Payments support and meeting of debt service obligations. Rigid and extensive foreign exchange controls were administered through the Foreign Exchange Allocation and Import Licencing systems.
The Cabinet Committee on Financial and Economic Affairs determined global foreign exchange allocation whilst an Inter-Ministerial Committee decided on the sectoral foreign currency allocation. The major controls during this period were:. Policy shifted towards the introduction of a fully liberalized trade and exchange system.
This led to the free floating of the exchange rate, the deregulation of the financial sector and the introduction of Foreign Exchange Bureaux de Change in mid Exchange controls were also further relaxed, a move which resulted in empowering Authorised Dealers to authorize most of the current account transactions in All foreign exchange applications were centrally processed and approved by the Reserve Bank.
The situation was still worsened with the withdrawal of IMFs funding in that culminated in further reviews of some of the Exchange Control policies. With the continued and persistent shortages and externalization of foreign currency and a mushrooming parallel market, for foreign currency, there was need to further review the existing foreign currency policy.
This led to the introduction of the current batch system through Directive RD of 15 November The introduction of this system meant that Authorised Dealers were completely stripped of their powers to approve foreign currency payments.
The Exchange Control solely dealt with all foreign currency payments, leaving the Authorised Dealers only with powers to vet applications submitted for approval by the Exchange Control.
Foreign currency shortages remained a real challenge to the economic. Foreign currency users submitted their bids to the Auction Floor for allocation of foreign exchange through their Authorized Dealers. Under TFCBS, a dual exchange rate system prevailed with market transactions being conducted at the inter-bank market exchange rate and critical Government payments being conducted at the official exchange rate. The dual exchange rate system was abolished in April to consolidate and support the growth of the export sector.
That resulted in all transactions being conducted at the prevailing inter-bank exchange rate. The Reserve Bank realized that the country could immensely benefit by tapping into the foreign currency resources which were being used to import various goods from across the borders. Some retail outlets were thus designated to adopt dual pricing to enable Retailers to sustain business and replenish their stocks without disruption of supplies to the market.
In , the Exchange Controls were liberalized in light of multi-currencing regime. Current Account transactions were liberalized to facilitate the free movement of goods and to create confidence in the economy. All applications for foreign currency payments were left to the Authorised Dealers. Surrender requirements and the exports approvals by Exchange Control were removed, and only left the instruments which are necessary for collection of foreign trade statistics.
Liberalisation was only extended to Current Account transactions. Capital account transactions remain restricted. Bank Supervision Annual Reports. Quarterly Consumer Protection Bulletins. Quarterly Industry Report - Banking Sector. Financial Intelligence Unit Publications. Monetary Policy Statements Monetary Policy Statements to Reserve Bank of Zimbabwe Act. Statues Administered by the RBZ. List of Registered Institutions. History of Exchange Control in Zimbabwe. List of Authorised Dealers in Zimbabwe.
Financial Markets Division Overview. The major controls during this period were: Post … In , the Exchange Controls were liberalized in light of multi-currencing regime.More...