RBZ completes blocked funds validation

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HARARE – The Reserve Bank of Zimbabwe has announced that it has completed the validation of foreign exchange applications submitted under the blocked funds framework.

The framework was announced in the monetary policy statement in February 2019. RBZ governor John Mangudya said in a press statement today that the exercise was now complete and gave companies an April 30, 2020 deadline to transfer funds in the local currency to the central bank.

“For all approved blocked funds transactions, the respective local currency should be transferred to the Bank by 30 April 2020 through normal banking channels.

“In order to ensure that companies comply with the 30 April 2020 deadline approved by respective regulatory authorities for the finalisation of their audited financial statements, and given the constrained working arrangements as a result of the Covid-19 pandemic, all blocked funds appeals that meet the laid down criteria but are not received by 30 of April 2020 will be considered null and void,” Mangudya said.

Applicants, through their authorised dealers, are therefore required to comply with these guidelines to facilitate closure of the processing of applications under the Blocked Funds Framework.

In February, the RBZ said the Exchange Control had processed and validated US$1.2 billion from 730 applications out of 1 080 requests. Of those processed, 299 transactions worth US$861 million had been rejected for lack of supporting evidence and double-dipping. The balance of 350 transactions worth US$457 million were being processed for finalisation by February 29, 2020. The validated blocked funds exclude the legacy obligations of US$361 million under the RBZ Debt Assumption Act.

“We cannot not pay these amounts as services has already been provided for. IATA is owed about $60 million because Zimbabweans not RBZ were travelling abroad. Of that legacy amount we also still owe grain suppliers from 2016… So how do we expect them to supply the country with grain this year when we haven’t paid.  Mangudya however added that payment will be spread over a period of time. “We are currently finalising  a payment pathway,” he said at that time

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