Mangudya to present monetary policy statement

Reserve Bank of Zimbabwe (RBZ) governor John Mangudya is expected to present his monetary policy statement this month, where he intends to bring fresh impetus to the economy that is eyeing an injection if it clears its debt with multilateral financial institutions.

BY BUSINESS REPORTER

Zimbabwe has put a credible plan to clear its $1,8 billion debt owed to the International Monetary Fund (IMF), World Bank and African Development Bank by June.

The clearance of the arrears is expected to unlock fresh capital for the country needed to reboot the economy.

Mangudya’s statement comes before the IMF concludes a final review of the economic reform plan, Staff-Monitored Programme, on Zimbabwe with the country having met the benchmarks in prior assessments.

The review is expected in the first quarter of this year.

John Mangudya

John Mangudya

Since joining RBZ in 2014, Mangudya has been dialoguing with stakeholders to build confidence in the banking sector.

He has also introduced measures to stem the ratio of non-performing loans (NPLs) in the banking sector.

From a peak of 20,45% in June 2014, the NPL ratio, decelerated to 14,25% in June 2015. It is expected to drop to 10% by June and 5% by December 31.

The reduction in NPLs is expected to boost lending to various sectors of the economy.

The Zimbabwe Asset Management Company has taken over $242 million in NPLs, thus freeing the balance sheets of banks.

The reintroduction of the interbank facility last year has helped in the distribution of liquidity in the economy.

The facility, guaranteed by the African Export-Import Bank, has now has over $200 million from the initial $100 million.

Analysts say Mangudya should introduce measures that would reduce interest rates to enable companies to borrow for retooling and expansion purposes.

One Response to Mangudya to present monetary policy statement

  1. Andrew January 13, 2016 at 6:34 am #

    The Minister of Finance was recently quoted as having said that “u cannot have nonetary policy without a local currency”. If I am right then what has changed for the RBZ Governor to issue a monetary statement? Money supply is controlled by the Central Bank in USA, The Fed.

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