By Business Reporter – Wednesday 11 March 2020
LOCAL – HARARE (Mining Index) – GOVERNMENT has taken steps and measures to ensure the success of the Reuters System in various sectors of the economy, the extractives sector included, which will see termination of the gold incentive facility, said Finance and Economic Development Minister Mthuli Ncube on establishment of the Currency Stabilisation Task Force in Harare today.
The Reuters system is a foreign currency trading system which allows banks to trade freely as a way of stabilising the exchange rate as well as bringing down inflation to sustainable levels.
The Reserve Bank of Zimbabwe (RBZ) ‘will terminate the gold incentive facility once the Reuters system becomes fully functional and a unified exchange rate is unified,’ said Mthuli.
The Reuters system is expected to generate a daily exchange rate in A.M and P.M fix.
The gold support facility is a revolving fund supported by gold sales which has seen artisanal and small scale miners benefiting from the scheme. This has seen the ASM sector contributing the bulk of gold deliveries to Fidelity Printers and Refiners (FPR) in recent years.
Due to the importance of the gold sector to the Zimbabwean economy, the central bank doubled the small-scale gold support facility from US$20 million to US$40 million to help the sector reach the 28-tonne target for 2017.
Zimbabwe has had no transparent and effective foreign exchange trading platform for a long time, resulting in official rates not being effectively determined, leading to thriving parallel market.
“To correct this anomaly, an electronic forex trading platform based on the Reuters system is being immediately put in place. This platform will allow foreign exchange to be traded freely amongst the banks and permit a true market exchange rate to be determined,” he said. ENDS// www.miningindex.co.zw
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