Uncategorized

CZI lauds latest RBZ measures

22 Feb, 2019 - 00:02 0 Views
CZI lauds latest RBZ measures Dr Mangudya

The ManicaPost

Nyore Madzianike Senior Reporter
MANICALAND businesspeople lauded the monetary policy statement presented by the Reserve Bank of Zimbabwe Governor Dr John Mangudya on Wednesday and expressed optimism that liberalisation of the foreign currency trading will suffocate speculative tendencies that have been haunting the economy.

The RBZ liberalised the US dollar exchange rate against Real Time Gross Settlement (RTGS) balances, bond notes and all currencies in the multi-currency basket as it seeks to formalise trade in foreign currency. The US dollars in the new market will be retained export earnings, with the remainder continued to be allocated by the Reserve Bank for essential goods and services.

Dr Mangudya said the move would bring sanity in the foreign currency market, promote exports, boost Diaspora remittances and investments, eliminate multi-tier pricing, as well as preserve the value of local forms of money.

The RBZ had pegged RTGS balances at one-to-one with the US dollar, but shortages resulted in high premiums for US dollars outside RBZ control.

“This will bring fairness and transparency in the distribution of foreign currency,” Dr Mangudya said, adding that the policy measures sought to formalise what was already happening on the parallel market, which the bank had no control over.

Economists who spoke to The Manica Post yesterday concurred with Dr Mangudya and said businesses that were threatened with imminent closure and those that had stopped trading due to non-availability of foreign currency had been given a new lease of life as they now have an equal opportunity to access forex on the formal market.

Mr Richard Chiwandire from Confederation of Zimbabwe Industry (CZI) said the introduction of free trading of foreign currency on the formal market was a positive move.

“I think the liberalisation of the free trading of foreign currency on the formal market was a positive move. Some businesses were closing down while others were down-sizing because they could not access foreign currency from the central bank while it was illegal to obtain it on the black market.

“Those companies are now able to access the foreign currency on the official market, which is also now legal,” said Mr Chiwandire.

He said the move by the RBZ to liberalise foreign currency on the formal market was also an indication of the seriousness on part of Government to breathe a new lease of life industries and boost local production.

“This is also an indication that Government is very serious on the Transitional Stabilisation Programme (TSP),” he said.

Economist Mr Vince Musewe said the move is most likely to bring price stabilisation as market forces would determine allocation of resources.

He said Dr Mangudya’s monetary policy announcement would also enable businesses to plan ahead.

“The move by the RBZ was good as market forces would determine the rate and allocation of resources unlike in the past where certain individuals would sit down and determine the allocation of foreign currency. I am very optimistic that this will ensure stability on the foreign currency market, which would go a long way in enabling companies to plan ahead and according to the rates set by the market forces,” he said.

Mr Musewe implored the central bank to desist from retaining and holding back some of the foreign currency as doing so would create artificial shortages on the official market.

“Government should stop holding back some of the foreign currency. We want to see the money on the market so that all those in need would access it on the formal market,” he said.

Mr Musewe also called for an upward adjustment of workers’ salaries saying once production increases people’s purchasing power would be quickly eroded.

Share This:

Sponsored Links

We value your opinion! Take a moment to complete our survey

This will close in 20 seconds