US dollar to be added to Sadc currency system
THE Southern African Development Community (Sadc) expects to add the US Dollar as an additional currency of settlement on the Sadc Integrated Regional Electronic Settlement System (SIRESS) by October this year, to further ease intra-regional trade.
At the moment, the South African Rand is the settlement currency for the SIRESS, which is a regional electronic payment system that Sadc member states developed to settle cross-border transactions faster without having to rely on intermediary banks from outside the region.
Sadc executive secretary Dr Stergomena Lawrence Tax, said progress was being made to eventually transform the SIRESS into a multi-currency settlement system.
“Settlement in US Dollars on the current platform is expected to go live in October 2018, while the whole multi-currency platform is expected to be fully operational by December 2019,” she said in an update.
“Noting that the facilitation of payments remains a key challenge to intra-Sadc trade, the addition of the US dollar that accounts for about
Sixty percent of intra-Sadc cross-border transactions is expected to facilitate greater cross-border trade and investment in the region.”
Tax said progress had also been made in making SIRESS a more inclusive payment platform, which also deals with low value cross border payments in the region.
“This milestone is important in consolidating progress and catalys- ing developments in some of the milestones already attained by the Sadc, in particular, the Sadc Free Trade Area,” she said.
The platform, established in 2013, allows for SIRESS participating banks to facilitate and settle regional transactions within Sadc countries on a gross basis and in real-time.
The system is operated by the South African Reserve Bank (SARB) on behalf of the Sadc Committee of Central Bank Governors, with SARB also acting as the settlement bank.
Currently there are 10 participating countries including South Africa, Lesotho, Swaziland, Namibia, Malawi, Mauritius, Tanzania, Zambia, Zimbabwe and Seychelles with a total of 72 participating banks, made up of 7 central banks and 65 commercial ones.