Business leaders have appealed to the responsible authorities to reconsider the current 75% foreign exchange retention policy, arguing that the allocated funds are insufficient to meet their operational needs.
In submissions made to the Reserve Bank of Zimbabwe (RBZ) Governor, John Mushayavanhu, the Chamber of Mines of Zimbabwe (CoMZ) said the forex retention threshold policy has adversely impacted the mining industry. As a result, some companies have been forced to scale down their mining capacity. It said:
Most mining companies are facing foreign exchange shortfalls to meet their operational requirements and funding of expansion projects.
The available foreign currency has been coming down largely due to falling mineral earnings (on the back of softening commodity prices), with the mandatory 75% now being applied on a shrinking foreign exchange base.
The Zimbabwe National Chamber of Commerce (ZNCC) has voiced concerns over the serious foreign currency shortages faced by companies in the country and is calling for an increase in the forex retention threshold. The ZNCC said:
We are engaging the central bank to increase the forex retention threshold further from the current 75% in order for our members to meet their forex requirements.
With the current system, companies are facing serious forex shortages. With most firms grappling to access forex on the willing buyer willing seller platform, the 75% forex retention threshold is affecting the companies.
Under the current policy, companies are required to sell 25% of their foreign currency earnings to the Reserve Bank of Zimbabwe (RBZ), while retaining the remaining 75%.
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