Reserve Bank Of Zimbawe The Reserve Bank of Zimbabwe (RBZ) is the central bank of Zimbawe. It is located at number 80 Samora Machel Avenue in Harare. It is 120m tall and has approximately 28 floors. It is also regarded as the tallest building in Zimbawe.
The RBZ is remodelled more or less similar to the Bank of Rhodesia and Nyasaland which was established as a central bank for the Federation of Rhodesia and Nyasaland (FRN). It thus has its origins to the central Bank of Rhodesia and Nyasaland. The RBZ was the successor of the Central Currency Board which had the sole prerogative of issuing money and regulating the monetary system of the FRN. Originally, the RBZ was situated in the then Vincent Building (present day Mapondera Building)and it was later moved to the then Bank of Chambers at 76 Samora Machel Avenue in June 1957. The carrying capacity of this building become under threat due to an increase in the operations of the bank as well as the growth of the staff. This prompted the establishment of another building which had the capacity to encompass all these new changes, which saw the relocation of the bank to number 80 Samora Machael Avenue. This building was officially opened on by President Robert Mugabe on 30 May 1996.
Roles and Functions of the RBZ
The RBZ operates in accordance to the dictates of the national constitution. By extension, it is only answerable to the law. It operates under the Reserve Bank Act which mandates it to regulate and or create monetary policies, protect the currency in the interest of balanced and sustainable economic growth as well as regulating the circulation of money. This Act is also remodelled in accordance to the Reserve Bank Act of 1964 which had the same dictates. The Act also stipulates that the RBZ is to be headed by a governor, who is usually appointed by the president on a five year term which is open to an extension.The governor has the responsibility of governing the day to day operations of the bank as well as issuing out monetary statements to keep the nation abreast in as far as the income of the state is concerned as well as its expenditures. The governor is assisted by two deputies and presently they are Dr. Charity Dhliwayo who was elected as an acting governor after the tenure of Dr. Gideon Gono's second term in 2013 and Dr. Kufukile Mlambo. , The Act also obliges the bank to have a Board of Directors who usual represent the key sector of the economy.
The failures of the RBZ has largely been pinned to have been worse under the stewardship of Gono who was appointed as the central bank's governor from 2003 to 2013. During his tenure, the country's inflation sky-rocketed to unprecedented levels. In 2008, the inflation was peaked at US$500 billion. This literary meant the destruction of the local currency, the Zimbabwean Dollar. Gono's predecessor, Dr. Leonard Tsumba whose termed expired on 30 June 2003 has been distanced from this RBZ predicament though the Zimbabwean economic crisis dates back prior to the appointment of Gono at the helm of the central bank. During Gono's tenure, liquid crunch, which is currently affecting most banks became a wide phenomenon. People were obliged to withdraw an amount which was equivalent to US$5 which was inadequate. However, clean uncirculated notes were readily accessible and available at the parallel market, which was also refered to as the black market, something that began to be pinned on what Gono labelled as money launderers.
The central bank was implicated in devoting itself more in what was referred to as its non-core business such as giving loans to farmers as well as purchasing farming equipment to be distributed to newly resettled farmers. The central government was thus accused of spearheading ZANU PF campaigns.
Gono also thrashed zeros from the local currency thrice during his tenure in a bid to curb the ever growing inflation to no avail however. This saw the introduction of new money denominations, some of which had expiry dates. The adoption of a multi-currency system in 2009 also shows that the RBZ was failing to stabilise the local currency. The RBZ has been widening the use of multi currencies.
RBZ After the Gono Era
Recently a new governor was appointed by the president who resumed work on 1 May 2014. John Panonetsa Mangudya, an economist and CBZ Holdings Cheif Executive Officer replaced Gono. Several names were linked to this post. Some of the preferred candiadtes were Nyasha Makuvise, former CBZ Chief Executive Officer, Mthuli Ncube, African Development Bank chief ecomonist and Andrew Bvumbe, head of Debt and Aid Management in the Ministry of Finance. Much is expected from the new governor who has a daunting task to ensure that the RBZ gets on its feet by at least sticking to its mandate. The Finance Minister, Patrick Chinamasa presented a gazetted bill in parliament which seeks to provide setllement of certain liabilities incurred by the central bank before December 2008.
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