The rand is due to lose its status as the regional currency.
The regional electronic payment system used by most Southern African Development Community (SADC) member states to settle cross-border transactions will soon be moving from a single currency to a multi-currency system.
According to the Southern African Research and Documentation Centre the SADC Integrated Regional Electronic Settlement System (Siress) will move from using only the South African rand as the currency of settlement to adding the US dollar by October this year, becoming a wholly multi-currency platform by December 2019.
The addition of the US dollar to the regional payment system is expected to facilitate faster transactions as the bulk of intra-SADC trade is done in the American currency.
“Noting that the facilitation of payments remains a key challenge to intra-SADC trade, the addition of the US Dollar – that accounts for about 60% of intra-SADC cross-border transactions – is expected to facilitate greater cross-border trade and investment in the region,” said SADC executive secretary, Stergomena Lawrence Tax.
She noted that the adoption of the multi-currency system would help cement the gains that had already been made with regards to the SADC Free Trade Area.
The Siress system was developed in 2013 to settle cross-border transactions faster without having to rely on intermediary banks from outside the region, and is operational in all SADC member states, except Madagascar and the newest member, the Union of Comoros.
Before the adoption of Siress, transactions usually took two to three days to clear.
They now take only 24 hours and fees paid to non-SADC clearing banks have been removed.
