By Revesai Mavetera
Mr Mnangagwa has enacted amendments to the Reserve Bank of Zimbabwe Act, bolstering regulations pertaining to foreign currency borrowing. The changes were made under the authority granted by the Presidential Powers (Temporary Measures) Act.
Under Statutory Instrument 108 of 2023, titled the Presidential Powers (Temporary Measures) (Amendment of Reserve Bank of Zimbabwe Act) Regulations, Mr Mnangagwa has outlined key provisions aimed at enhancing transparency and accountability in foreign currency borrowing.
The amended Section 7(1) of the Reserve Bank of Zimbabwe Act [Chapter 22:15] introduces a proviso (condition) to paragraph (n), which governs the powers of the Reserve Bank. The proviso states that the Reserve Bank is now authorized to borrow foreign currency solely on behalf of the State at the instance of the Minister, and not for its own purposes.
This change ensures that the Reserve Bank can no longer independently borrow foreign currency. Instead, any foreign currency borrowing must be expressly authorized by the Minister responsible for financial matters. By involving the Minister, the amendment aims to enhance oversight and accountability in foreign currency transactions.
the amendment also addresses the potential impact of such borrowing on reserve requirements. If the borrowing affects the reserve requirements specified in section 49(2)(a) of the Act, the suspension of the reserve requirements will be guided by the provisions outlined in section 49(3)(a). This provision serves as a safeguard to ensure that the suspension of reserve requirements is conducted in a controlled and regulated manner.
