This should tell Finance Minister Mthuli Ncube and the Reserve Bank of Zimbabwe not to spring major policy shifts on everyone the way they did with the re-introduction of the Zim Dollar and the effective ban of forex transactions locally.
RBZ contradicting self
In their directive to banks yesterday the RBZ said in paragraph 3.4:
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.
A few paragraphs down in paragraph 4.3 they said:
For individuals, the current policy shall remain in force with Authorised Dealers also required to apply the usual KYC and AML/CFT standards
Some banks decided to just say no
At four banks we asked, they were not allowing individuals to withdraw out of their nostro accounts. Some were saying this is until further clarification from the central bank. There was one bank though that was facilitating withdrawals by individuals.
The RBZ clarification
The central bank has issued another statement specifically regarding individual nostro account withdrawals:
For corporates, banks shall apply the KYC principle for any intended cash withdrawals.
The current withdrawal limit for individuals remains US$1000 per day.
Individuals are still able to withdraw their cash from their individual accounts and banks are, in line with international best practice, expected to apply the AML/CFT principles.
Further to our Directive, the Reserve Bank wishes to advise that contrary to certain information being circulated on social media, cash withdrawals by individuals are still permissible and the policy position hasn’t changed.
Risk of a run on the banks
The inconsistencies and unclear roll out of the multicurrency ban may cause those with nostro account to make a run for banks demanding withdrawals. This is always unwanted because banks may not always have everyone’s money in an instance. Being turned away at the bank will fuel the run further and the cycle gets worse at every turn.
The impact of this is limited though in Zimbabwe right now because according to December statistics given by the Reserve Bank of Zimbabwe, 97% of money in nostro accounts was in corporate accounts. Businesses are not being allowed to withdraw that money as cash.
Should you trust?
I wouldn’t trust the central bank. They have made and broken too many promises in a space of less than 3 years. It’s sad for me to take this position but this is my genuine sentiment.