I never bought into the whole FCA nostro nonsense. This is one of the times however, that I hate to be proved right. The directive sent to banks by the Reserve Bank of Zimbabwe today the 25th of June 2019 is your confirmation that you should never trust what the Zimbabwean government, the central bank and your bank manager tell you.
Liar liar
Does anyone remember how the minister of finance, Mthuli Ncube and the Reserve Bank of Zimbabwe Governor, John Mangudya promised that money in your FCA Nostro account was safe and would not be touched? They lied.
Here is what the RBZ is now saying about your FCA account:
Funds in all these accounts listed in Table 1 above will retain their foreign currency status and shall continue to be utilised for the settlement of international transactions. In cases where the holder of such an account intends to settle domestic transactions, they shall be required to liquidate their foreign currency account balances to the interbank on a willing seller willing buyer basis.
These are the people that go around the world trying to convince investors that their money is safe in Zimbabwe. What’s disappointing is that these guys did not just decide to raid our wallets like this, they knew right at the time that they were making these promises that the end game was to take your money.
Signals to this effect were all over the show. I even wrote then that you were better off keeping your money under the mattress, the nostro FCA’s were just bad news.
Not the first time
This whole thing happened to us less than three years ago when the Bond Note was introduced. The promise then was that you could always get your US Dollars on demand if you didn’t want to be given Bond Notes at the bank.
Before we knew it, we could never get US Dollars. If we wanted to withdraw that currency we had to deposit into all kinds of prepaid cards. Hey but we had deposited USD in the regular accounts at the beginning?
Beware of the current lie
Right now this is the current lie being told by the powers that be to finish you off and commit you into poverty:
In order to encourage and facilitate the flow of foreign currency, diaspora remittances shall continue to be received in foreign currency. The recipients shall have the option to receive remittances in cash or sell their remittances on a willing seller willing buyer basis to Bureaux de Change and Authorised Dealers or deposit into Individual Nostro FCA.
Very soon, money sent to you by your relatives who have braved the big bad diaspora will be snatched too. They will say the only option open to you is to get a Zim Dollar equivalence of your money. We all know that the interbank rate is not the true equivalence of your money.
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Is the writer of the article deliberately choosing to interpret the statement in an alarming manner. It’s very simple why not settle International obligations with your Nostro, the balance is still there why cause unnecessary alarm. The USD is no longer legal tender so why do you want to withdraw USD cash unless yo feed the speculative Black Market be honest my brother, Mwena yavharwa and warwadziwa
You are being naïve if you think there is no cause for alarm. The only reason this legal tender law was made was to relieve people of their precious USD. The informal market has been importing essentials all along. Now that they are being forced to this intermarket arrangement which does not work. U will see the effects. Empty shops are going to greet you. We have been here before. If government tussles with the economy and business they will lose. You are going to see a drop in remittances as people run for the hills
I have to agree. The writer of this article is clearly causing unessary panic. This practice of being given an option to change to a local currency or keep your forex is what you would be obliged to do in South Africa the UK and even the United States.They make you trade in their currency for all domestic transactions. Why would you with such influence, write such a one sided article. Surely you should have done your research and told the readers what other countries do. Tech Zim… your credibility as a source of news in now under serious scrutiny. I for one am completely disappointed with your lack of objectivity on this issue.
You are comparing our basket case economy to functional economies where the banks and government are respected and trusted by the tax payers and citizens. That is not the case in Zimbabwe, so you’re wrong. Anybody who works for an honest living has cause to panic, I can’t speak for those who are paid to make people celebrate mediocrity and lies.
You are an idiot! Yes, in other well established countries that have working economies, rule of law etc…….. you trade in the local currency. You can take the Rand from South Africa to the UK and swop the Rand for the Pound, you can even swop the Pound for US$ when people from the UK visit the USA. Try and take you bond note or RTGS to any of these places and see if they will swop it for the Rand, the US$ or the Pound. Wake up!!!
Yes that it
You might want to do a little reading because u cant compare the rand with the pound and the usd. The latter are hard currencies and the rand is not, just as the zim dollar is not. Internationally they do not carry the same weight and so can’t just be changed like that. The hard currencies USD, Pound and Eur are stable enough that they can virtually be changed into any local currency. As long as u can use a nostro linked visa/mastercard then u can still do your transactions accross borders. As long as govt actually stays above board there is nothing wrong with the new policy, as thats what virtually every country in the world does. Only time will tell if they do and for all our sakes i hope they get it right. Because if they get it wrong no one wins..even being right is still a loss.
Other countries use their own currency and Zimbabwe should also do the same. Where in the world has currency lost value at the rate of RTGS$,this means your savings are better off in commodities (like cattle) and other stable currencies (kwacha, rand, usd…). It is painful to note that in Zim banks are not a safe way of keeping your money and you would rather trust your pillow
Uyu akazungaira uyu…..mwena wavharwa ndewako wekufema mumwe wangu ….come back to this chat pachristmas …wozoona kty haugaye long term effects of some decisions..
We have walked this route. Deception and lies from the fiscus and the RBZ ‘the wells are now full of sewer’. No one is panicking anyone here the truth of the matter is someone is saying the unwanted truth and you cannot stomach it. There is an option to read the Herald, it won’t panic you.
Sorry to cause alarm Sifanele. I however don’t regret getting a reaction out of you.
There indeed is a mwena that has been closed, the mwena that’s allowing creitical imports to sustain families.
A few weeks ago, my nephew suffered second degree burns. There were special bandages he needed to get the wounds dressed. Those bandages were not available locally. We had to go and buy from SA. Now, if I am only allowed to withdraw from my FCA in Zim dollar and the Zim dollar is not exchangeable in SA how do I help in situiations like these? True life and death situations
Thanks Tinashe. let’s help those individuals who have outsourced their thinking capabilities to zanu pf to at least learn to think for themselves, it has long term benefits!
I’m sorry about your nephew and i’m glad you managed to make a plan. But what i’m struggling to understand is why your nostro account did not have a visa/mastercard associated with it…would this not have achieved the same thing as hard cash?
So this happened before the directive hey so we did not have a problem of how to withdraw cash.
I gave the story as an example to highlight why the RBZ must not restrict people to access their forex (so far they are saying they won’t). If ever they start restricting such they will affect ordinary people like my family that just wanted medical care for a baby. This is the situation the country is in, there are no bandages in our hospitals. Forex in our hands makes us a little less vulnerable to these circumstances.
That said, I consider my family extremely privileged that we even had the option hey. The majority do not even have any forex to think of whether they can access it or not. Some can afford to buy it (yes on the black market) but an even bigger majority cannot. Without bandages, wounds get infected and infection is almost a death warrant. This is the situation and we must adopt solutions cognizant of this reality otherwise we will say things like. “other countries don’t allow the use of forex” yet those other countries have bandages in their hospitals
You obviously have never had your money stolen. This is a repeat from 2007. 2011. Desperate to line their pockets and pay for expensive jets and Lamborghini . Where is the money from mineral exports. Where is the money from diamond exports.what have they done with all the money generated at toll gates. WHERE IS THE MONEY.. instead they pounce on the poor
In the UAE and other jurisdicions yyou can use any currency, that’s why iyr leaders keep their money there
Tinashe you are causing panic. The willing buyer, willing seller was set in place in February. It had the same wording as now.
Maybe now they’ll force us to give up our forex, maybe but now that’s just speculation.
The other thing, you always assume people went and opened FCAs to go deposit their forex. Not really. People opened FCAs because they had to. Like me. I export and get paid in forex. There is absolutely no other way I can get that money besides via a bank. None. I know a lot of other people in the same boat.
Whatever you told us to do or not to do is not relevant, we had no choice so don’t gloat.
Far from gloating hey. I am one of those that have been affected by this and I can’t withdraw my forex earnings in the currency I earn them and yes I was forced to open the FCA because I needed to receive those funds. Here is my gripe though:
1. I used to receive funds from outside the country in my regular account. Overnight I couldn’t withdraw those funds in hard currency anymore when the Bond was introduced. I had to stop receiving those funds and figure out how to fund some card. But this was money that had come in as hard currency
2. The exact same thing has happened with the new nostro account.
Why do I need the money in USD anyway?
A few weeks ago, my nephew suffered second degree burns. There were special bandages he needed to get the wounds dressed. Those bandages were not available locally. We had to go and buy from SA. Now, if I am only allowed to withdraw from my FCA in Zim dollar and the Zim dollar is not exchangeable in SA how do I help in situiations like these? True life and death situations
Now think of the many small businesses that are actually keeping the families fed in this country. If they don’t find a way to smuggle money out (which is worse for the economy) there will be shortages of basically everything. Look at how the RBZ managed procurement of fuels is panning out. What makes me angry mostly is that the most vulnerable population groups are the already disadvantaged folks that are not even visiblke to you and I.
In my nephew’s case we were fortunate to have a plan for him. There were a lot of other kids we saw at the hospital in the same condition but the families had no solution for them. Mimnd you, the burns are coming because there is no electricity anymore and kids who did not know how to act around fire are suffering for it.
@ anonymous why do you compare our situation to the likes of SA and UK countries with globally recognised currencies and tradable across their boarders. Do you think if that was the case for Zimbabwe we would even be worrying.
The writer is not being alarmist at all.What he is say is what is happening.Its amazing how some people are choosing to trust this statement which has so many grey areas,firstly we were already struggling to get our US $ even when some companies were trading and billing in US $.Obviously this current situation will drive the formal economy underground and cause capital flight.Where will the banks get US $ to settle US $ obligations?People were already struggling to get their US $ from remittances so the situation will get worse.
Believe what you may but for me,am back in my 2008 survival mode.Fool me once,shame on you but if fool me twice,shame on me.
P.S read what Argentina did in 2012
This isn’t even fool me twice hey. Maybe fool me four times at this point 😂
Why should I even trust a govt central bank that introduced bond (against my will), which I later cannot withdraw, allowed the opening of FCA Nostro accounts where I can deposit/transfer cash but cannot withdraw it, etc? How do exporters get the true value of USD in local currency which is NOT based on actual wealth to import goods and pay for services provided for internationally?
I am not even talking about handling cash, even transfers.
Why should I trust officials whose children are directly involved in all sorts of shady deals including forex trade and money laundering?
Why should I trust a govt which provides tenders to convicted fraudsters while making life terrible for ordinary bread-winners?
If you are a true bread winner you would NEVER put up with this BS, I can’t speak for thieves and fraudsters….and bootlickers.
Imi Vanhu Musadaro aripiko today for his/her thoughts on the matter
A question for someone who may know the answer, if I were to deposit US$10,000 into my FCA Nostro account in order to make an international payment of said amount, that is ok?
Now if my family member outside the country were to send me US$10,000 into my FCA Nostro account for me to use in Zimbabwe, I would have to accept it at the interbank rate of 6.31 so I would get $63,100 into my local account to go and spend at the supermarket?
Now if I were to land a miracle job and in a few days have $63,100 in my account again and decided that I want to pay said family member back the US$10,000 that they had sent me, will I be able to?
I am not asking if it will technically or legally work, of course that should be “yes it will” I am asking if it would actually work, would the bank accept my money and make the US$ payment back to my family member?
This also should be a nobrainer as there is absolutely no reason for it not to run as smoothly as that, but the problem with all this currency changing, switching and messing around is that in reality no matter what is happening right now Zimbabwe simply does not have the foreign currency available to meet demand, so before the few days have passed that original US$10,000 that was sent to me has been long spent and when I return to try and repurchase it to send back it simply is not available and a simply ban on the use of foreign currency is not going to solve that fact.
There has to be other changes, there has to be issues with the economy resolved in order to secure the value of our money, simply allowing or banning the use of a currency is not going to solve the state of the economy.
I would also like to know why it is so important for us as a country to have our own currency when we can see we can not yet manage it, is there any other reason other than the ability to print money as and when we please?
I remember as a child playing shop with my siblings, we would each gather up items from around the house and each open our own shop, the person who was the bank was the only one who was allowed to create money, needless to say the game always ended the same, the bank owned everything and charged such high prices that nobody had the ability to buy back what they had already sold to the bank. It would seem if the only goal is to have a currency that the bank can create it only works in favor of that bank in the long term.
If we had the ability to make our own currency work and prosper, we too would have the ability to make the economy work regardless of the currency we were using.
But why not, lets have a new currency and focus on it rather than the issues that are causing the requirement of banning of currencies, the issues causing the lack of raw materials and basic human needs, lets just play with currencies and pretend that is the beginning and the end of all our problems.
A very visual way to help explain why this is a very bad idea. Well a bad idea from the perspective of the average citizen. I guess it is a terrific idea for ‘the bank’