HARARE – Reserve Bank of Zimbabwe (RBZ) governor John Mangudya presents the mid term monetary policy statement on Monday amid a worsening foreign payments backlog and rising on the dollar on the parallel market.
The review comes at a time when there have been changes at the Ministry of Finance and Economic Development following the appointment of banker and economist Mthuli Ncube and former Barclays Zimbabwe MD George Guvamatanga as minister and permanent secretary respectively.
The review also comes amid concerns that shortages of foreign currency continue to pose a challenge to product availability for industry and that resurgent inflationary pressures will negatively affect consumer’s disposable incomes and confidence.
Ncube has intimated the removal of the bond note from the official system and the return of the Zimbabwean dollar which was dumped in favour of a multi-currency regime in 2009. The local currency was demonetised in 2015.
“Ultimately, we would like to have a Zimbabwean dollar that is stable, that we will have confidence in and we will start working towards that. You will hear in the monetary policy statement the first steps towards that. Building reserves, if we are to have a domestic currency, we need to build reserves and also support output; production in the gold sector: that is part of reserves,” Ncube said after being sworn in two weeks ago.
The worsening foreign currency crisis has seen the payment backlog rising to $700 million from $600 million and has pushed up rates on the parallel market. The dollar is now attracting a premium of above 100% on the parallel market.
