Zimbabwean banks struggle with foreign payments backlog
Payments via TTs are taking longer than a month to process.The diminishing 'Nostro' account balances held by Zimbabwean banks has created serious settlement problems for international payments, resulting in important delays for telegraphic transfers (TTs), according to a report from the Financial Gazette.
Nostro account refers to an account that a bank holds in a foreign currency in another bank.
Payments via TTs are supposed to be processed within 48 hours but are now taking much longer to process.
Some banks are now advising their customers to wait at least a month after initiating a TT for it to go through.
The President of the Bankers Association of Zimbabwe, Charity Jinya, told the Financial Gazette that the foreign currency liquidity shortages were caused by a number of factors, including the continuing trade deficit and the increasing issuance of Treasury Bills, which "continue to put pressure on the country's ability to effect transfers outside the country".
The situation is especially affecting importers, such as retailers, which are facing delays in processing TT's to cross border suppliers, thus affecting their ability to restock.
The Reserve Bank of Zimbabwe has set a priority list
"to promote efficiency utilization of foreign exchange and to re-orient import demand towards productive uses".