This follows measures announced by the Ministry of Finance and Economic Development and the Reserve Bank of Zimbabwe last week, which seek to stabilise the exchange rate by ensuring, among other things, that forex trading flows through formal channels such as banks and BDCs.
According to Finance Minister Mthuli Ncube, BDCs are to be immediately liberalised as set out in the RBZ rules which are ready for implementation. The country has 67 registered Bureaux with 600 branches countrywide. In order to ensure transparency and to promote interbank market efficiencies to ensure price discovery, the RBZ is set to onboard all the BDCs on an online retail platform where an official receipt will be issued against all trades and fed in real-time to a central monitoring server.
This is line with trends in countries such as South Africa where all purchases and sales of foreign currency by bureaux are immediately routed to the SARB.
The new rules will require BDCs to trade at the open market price as announced last week.
FinX understands that Treasury and RBZ have engaged C-Pay FX a system developed by Escrow Systems to host the centralised forex trading IT system. C-Pay is already in use by four licenced BDCs.
The whole set up is controlled by the messaging gateway designed to interact with upstream systems (client facing) and downstream systems (operational systems). The system is made up of three main elements, which are: C-Pay FX Central Rate Board, C-Pay FX Central Bureau System and C-Pay FX Surveillance System. Suspect transactions will immediately be flagged for further scrutiny by the Financial Intelligence Unit (FIU).
According to timelines seen by FinX, the roll out dates have been tentatively set for March 18, 2020 with the formalisation processes expected to be finalised when the taskforce holds its first meeting today (Monday, March 16, 2020).
Meanwhile, banks have been directed to submit indicative bid/ask rates on the Reuters trading platform by this morning. Under the system banks will be the market makers and will charge bureaux very thin margins on transactions which are routed through them as the authorised dealers. Bureaux will be market takers and can trade at a +/-5% of daily forex fit.
