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Agribank Hit The Hardest By The Exchange Rate Issues In Zimbabwe

4 years agoSun, 07 Jul 2019 10:05:39 GMT
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Agribank Hit The Hardest By The Exchange Rate Issues In Zimbabwe

State-owned Agribank is one of the banks that was hit the hardest by the policy change that took place on 20 February 2019.  On that day treasury decided to scrap off the 1:1 policy that meant one USD was equivalent to 1 bond.

Since the free-floating exchange rate policy, the state-owned bank is subjected to a foreign currency revaluation loss as it has more forex liabilities.  The bank is reeking is a US $20+ million debt that is yet to be repaid and are behind schedule already because of foreign currency shortages being experienced in the country.

According to The Standard:

Last year the bank secured another US$30 million credit line, which is yet to be drawn down from the same institution. Since the floating of the exchange rate in February 2019, the bank is exposed to forex revaluation loss as it has more forex liabilities than forex assets.

“Threats will also come from an IDC SA legacy debt wherein repayments are lagging behind schedule due to shortage of foreign currency, as at 31 May 2019, US$20 290 319 due to IDC was in arrears”

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Many companies are also experiencing the same problem as things change in the country. The mid-year fiscal policy will be published sometime this month.

 

 

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