The Reserve Bank of Zimbabwe has with immediate effect abolished the tobacco growers’ 15 per cent foreign currency entitlement held in foreign currency accounts (FCAs), reports The Herald.

The Reserve Bank of Zimbabwe said in a circular this week if farmers want to retain this portion, they will have to buy foreign currency at the ruling interbank rate (US$ 1 to Z$ 250). Apart from that, tobacco farmers will be paid 100 per cent of their earnings in local currency.
This will come as a blow for tobacco growers, many of whom have already held on to their crop indefinitely in protest ofat what they described as "unviable prices".
Tobacco Industry and Marketing Board technical director, Dr Andrew Matibiri, explained that farmers wishing to retain the 15 per cent in FCAs will now have to direct their banks and sales floor to deduct the 15 per cent foreign currency from their sales proceeds. Previouslyior to this, farmers could retain 15 per cent of their foreign earnings, but the funds were held in a FCA account by the central bank. Farmers did not have direct access to these funds.
Only the Reserve Bank could pay directly to the supplier for any goods or services on behalf of the farmer.
At the auction floors, tobacco is sold in hard currency before growers are paid the equivalent in local currency. (sra)