We Have Struck The Right Chord, Says Mangudya

Reserve Bank of Zimbabwe (RBZ) governor John Mangudya has said that the latest policy measures implemented by fiscal and monetary policy authorities have strongly impressed the private sector.

Speaking in an interview with State media on the sidelines of the Afreximbank Annual Meetings that ended on Wednesday in Accra, Ghana, Mangudya said the measures will address currency and price instability in the economy. He said:

Definitely, we have struck the right chord, that’s what we have been longing for as a country, and because of the reaction to those measures by both the private sector and Government, it means we have struck the right chord.

Mangudya said what is now left is consistency as it will increase confidence. He said:

So what we now need in the country is to consistently apply our policies in the way we have put them on the table and I do believe what we have put in place is the best foot forward which we don’t need to change anymore.

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One can only improve but not change the measures that we have put in place. That way we become credible, we become consistent and increase confidence, because confidence is the best currency that any Government, any central bank, can give to its society.

Asked why this time will be different given unsuccessful measures in the past, Mangudya said:

We cannot continue to live in the past, we now need to go forward and we cannot go forward using historical reasons which will not make us prosper.

Below are some of the latest measures introduced by authorities to tackle price and exchange rate volatility:

• Businesses are now allowed to retain 100 percent of foreign currency proceeds from domestic sales.
• Treasury announced it would assume all sovereign external debt payment obligations from the RBZ.
• Treasury also said Customs duty is now payable in local currency, with the exception of designated or luxury goods and where an importer opts to pay in foreign currency.
• The RBZ’s Monetary Policy Committee resolved to increase the bank policy rate from 140 percent to 150 percent per annum in response to the recent increase in inflation.
• The weekly auction was changed and now offers just US$5 million a week with bid limits set at a minimum of US$1 500 and a maximum of US$50 000.
• A new wholesale auction system, where banks bid on behalf of their clients, was introduced. The interbank maximum trading limits of between US$100 000 to US$500 000.

More: Pindula News