The Reserve Bank of Zimbabwe (RBZ) has just told financial institutions that its RTGS platform can now also handle Foreign Currency Account (FCA) RTGS settlements. Before today, the RTGS platform only handled transaction of bond notes but not foreign currency or US dollars. So if a company wanted to move money from one account to another, the company had to use telegraphic transfers which are relatively expensive and take days to get settled.
But with this new arrangement, companies can now also use the RTGS platform to move money in lesser time (RTGS is realtime-based so no more waiting days) and at a relatively cheaper price. In essence the facilitation of FCA on the RTGS makes the movement of foreign currency in the economy more mobile than what it was when companies used telegraphic transfers.
The system hasn’t yet gone live but very soon it will as banks have already been instructed to start testing it. Here is the full text:
CIRCULAR TO RTGS PARTICIPANTS — MULTICURRENCY UPGRADE — ADDITION OF USD ON THE RTGS PLATFORM
We advise that the RTGS platform has been upgraded to include the United States Dollar (USD) to facilitate settlement of USD Nostro FCA transactions. The function is now available in the test environment for testing by participating institutions.
All participants are urged to send test messages end to end and ensure a full cycle of the transaction is completed. Results of the test should be logged immediately on the attached user acceptance testing form and submitted to the Reserve Bank on a daily basis until Friday,01 February 2019.
It is expected that the settlement of USD transactions will commence soon thereafter in the live environment.
Please be advised accordingly.
J. Mutepfa,
Deputy Director, Financial Markets Division — National Payment Systems28 January 2019
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7 comments
Corrupting the Nostro USD with RTGS fictitious money again before people even gain enough confidence in the new Nostro FCA arrangement. The problem is that rbz is a referee and player in this RTGS game. There will be nothing to stop them injecting more (fictitious) USDs into the system in the same way they corrupted the original USD account balances. Here is a scenario: Supplier supplies goods to govt/rbz worth USD 1000 and asks to be paid in his nostro USD account with bank XYZ. Rbz can simply make up this money and send it to bank XYZ through the RTGS system creating a small imbalance in the system. If the pool of real USDs in the local banks is large, this small amount will not cause any immediate ill effects but if this is repeated over a period of time, the problem will start to show up with banks failing to honour real cross border payments.
In my opinion local clearance of forex denominated is the major reason why we are where we are today. It gives the thieving RBZ access to manipulate the syatem for the benefit of the status quo
let the raiding begin…. AGAIN
This is another example of the RBZ meddling in something that it needs to leave alone. By the Way are RTGS’ “REAL-TIME”. Last i transfers happen next day – what sort of business is that.
RBZ should stop this RTGS rubbish and allow for INSTANT LOCAL INTER BANK TRANSACTIONS
The problem of using technical terms without knowing what they mean – Real time in practice instant or very close to instant or near real time especially for financial or tracking systems. With the Zim RTGS system days can pass before a transaction completes – invalidating the whole concept of “real time”. The aspect or dimension of time needs to be injected or infused into our cultural consciousness and work ethics to catch up with the technological progress around us.
I wonder what RBZ’s interest is in facilitating FCA Nostro transfers – goodwill or ill intentions. Trust in the banking system has NOT yet returned.
…Okay, so help me understand. Does this new announcement affect master cards in any way? ..And if yes , How? Iam still trying to get the hang of the banking jargon. Iam afraid of all of a sudden waking up with my master card “Nostrosised” or something.
Now can they can “print” FCA too. Put your money there at your own risk!!