RBZ puts raft of measures meant to stabilise the economy

By Tafadzwa Muranganwa

The Reserve Bank of Zimbabwe has come up with a litany of measures   in its  quest to bring price stability   in the wake of  the prevailing  inflationary environment.

Announcing the measures in the monetary policy read by the central bank governor John Mangudya last Wednesday, RBZ acknowledged  that the parallel foreign currency exchange rates  which are  pegged between $3-$4  have led to  price distortions hence  the bank has  now established an inter-bank foreign exchange market.

“After taking account of the implications  and putting in place safeguards to maintain stability in the forex market,  the bank is, with immediate  effect establishing an inter-bank foreign exchange market in Zimbabwe to formalise the trading of RTGS balances and bond notes with US$ and other currencies on a willing-buyer-willing seller basis through banks and bureaux de change,” stated Mangudya.

The central bank has denominated   RTGS balances , bond notes and coins in circulation  as RTGS dollars  to become part of the multi-currency system  a move it says will eliminate  the existing multi-pricing system.

“The use of RTGS dollars for domestic transactions will eliminate   the existence of the multi-pricing system and charging of goods and services   in foreign currency within the domestic economy

“In this regard prices should remain at their current levels and to start   to decline in sympathy with the stability in the exchange rate given that the current monetary balances have not been changed ,” revealed the RBZ governor .

Under the new monetary policy  banks will   report activities of the inter-bank foreign currency to RBZ  on a daily basis.

Foreign currency allocations to critical products and services shall continue to be prioritised ,   according to Dr Mangudya.

“Foreign currency requirements  for government expenditure and other essential commodities that include, fuel, cooking oil, electricity ,medicines and water chemicals shall continue  to be made available through  letters of credit facilities and or the Foreign Exchange  Allocations committee,” cited the RBZ  boss.

The bank has also   activated anti-money laundering measures   and cyber risk management in its quest to restore sanity in the economy.

Currently, the country is reeling from a economic malaise brought about by the inflation being pushed by black market foreign exchange rates.The initial bank exchange rate has been pegged at $2.50