The government has revealed that it will protect people’s savings by preserving the value of their bank account balances on the current rate of exchange of 1 to 1, and ring fencing foreign currency accounts.
In a statement, the Minister of Finance and Economic Development, Professor Mthuli Ncube noted the concerns surrounding the RTGs deposits and foreign currency accounts and clarified the government’s position on the issue.
“Government recognises concerns surrounding RTGS deposits, and we commit to preserve the value of these balances on the current rate of exchange of 1 to 1, in order to protect people’s savings. Over and above the Nostro Deposit Protection Guarantee from Afreximbank, we are also reinforcing Nostro foreign currency accounts with a statutory instrument to guarantee that these are private deposits, and neither the Reserve Bank nor government has any access to them,” he said.
The Minister added that the country shall continue to use the multi-currency system which was put in place by Government in 2009, adding that an orderly currency reform programme will be implemented when the economic fundamentals are right to do so.
“This [multi-currency] system entails that foreign exchange earners are not prejudiced of their regulatory foreign exchange receipts and that those who do not earn foreign exchange have access to foreign exchange through the banking system as is per the current policy of foreign exchange management system. In parallel, the Reserve Bank shall continue to maintain adequate resources for the import of essential commodities,” he said.
The Minister noted various challenges in the economy, which include cash shortages and the proliferation of foreign exchange parallel market rates which have a negative effect on prices.
“These challenges require that Government positions the economy on a strong footing by implementing reforms that include cutting on government expenditure, working towards import parity pricing system, increasing efficiency on government delivery systems and fast-tracking the State Owned Enterprises reforms, among a host of reforms,” he said.
Professor Ncube also said the proposed reforms shall be accompanied by a strong and sustainable currency reform system, which must be effective and has minimum disruption to business.