South African and other travellers will be able to use their own currency in cash or through credit and debit cards in Zimbabwe after the Reserve Bank of Zimbabwe clarified that tourism operators will be allowed to accept settlement for goods and services from tourists in foreign currency. This is despite the banning of payments for local goods and services using foreign currencies inside Zimbabwe, under new monetary policy measures aimed at addressing economic distortions.
South Africa’s struggling northern neighbour has introduced the Zimbabwe dollar for settling local payments.
“Players in the tourism sector are designated as tourism operators, which are permitted to receive foreign currency payments from non-residents (foreign tourists),” said the central bank’s deputy director for economic policy, William Kavilan, in a presentation to the Chartered Institute of Accountants Zimbabwe in Harare last week on the implications stemming from the new monetary policy measures.
Individual foreign currency account holders from Zimbabwe will also get access to their foreign currency through withdrawals, but companies and non-governmental organisations have to convert their foreign currency funds using the interbank exchange rate before use.
Although the Zimbabwean tourism operators have been given room to accept payments in foreign currency, they will not be allowed to pay local suppliers in foreign currency.
Local banks in Zimbabwe are battling to contain the fall-out with one of their service providers that wants to be paid in foreign currency, which the finance institutions says is not feasible after the new monetary measures.
The central bank, however, added that prior exchange control approval was required for the “operation of special foreign currency transitory accounts to facilitate downstream payments” in foreign currency.
Zimbabwe is battling acute foreign currency shortages while the central bank and treasury have been implementing policies to ensure that Zimbabwe does not re-dollarise.
Banks were also working on ATMs that will allow tourists and travellers from abroad to withdraw local notes from their foreign cards using the prevailing interbank exchange rate through platforms such as Visa and MasterCard. Banking sector managers said on Friday that banks were working on switching on this service.
BUSINESS REPORT
