Travellers can now take US$10 000 cash out of Zimbabwe

The Reserve Bank of Zimbabwe (RBZ) on Wednesday doubled the amount of foreign currency in cash someone can physically carry on their person or in their baggage out of the country to US$10 000, reported The Herald.

 

RBZ Governor John Panonetsa Mangudya announced the new cash limit in a Statutory Instrument made in terms of the Exchange Control Act.

 

The US$10 000 limit in baggage or pocket can be cash in any foreign currency, gold coins, or in any desired combination of foreign currencies or gold coins.

 

Travellers can also take out the equivalent of US$1 000 at the interbank rate in “demonitised” Zimbabwean notes and coins.

 

According to the new regulations, anyone intending to carry more than US$10 000 in notes and coins, rather than making electronic transfers, requires exchange control approval.

 

However, diplomats are not subject to these limits.

 

An economic commentator, Prosper Chitambara, said the new regulations are a welcome development. He said:

 

It is an improvement from the US$5 000 that was there before and it’s meant to relax capital controls in terms of the export of cash.

 

It’s critical in terms of engendering greater levels of confidence within the economy.

 

The more relaxed the control, the greater improvement in confidence in the economy.

 

However, Harare-based economist Gift Mugano argued that the legal instrument will result in more foreign currency being taken out of the country. Said Mugano:

 

It does not stimulate economic growth but rather will expedite the draining of foreign currency from the country.

 

The net effect of this is a liquidity crunch particularly now since we are now dollarised.

 

You are aware that we have a large informal sector and by increasing the amount of money that can be taken out of the country to US$10 000, we have really taken a position to take oxygen out of our system.

 

The most important exchange controls which must be dealt with relate to export retention and liberalisation of the exchange rate.

 

Increasing foreign currency which can be taken out is merely draining oxygen from our system.