Mangudya paints gloomy picture for local banks

FOREIGN financial institutions are closing offshore accounts held by local banks, exacerbating the liquidity situation in the country, Reserve Bank of Zimbabwe (RBZ) governor, John Mangudya has said.

BY TATIRA ZWINOIRA

John Mangudya
John Mangudya

Addressing guests at a luncheon hosted by the St Luke’s Anglican Church on the importance of the impending bond notes as a short-term measure to meeting the liquidity challenges on Sunday, Mangudya said the situation was dire.

He said one of the reasons why there was a liquidity crisis was that the country was double-dipping by using nostro accounts for foreign payments, and using the money for local cash demands.

“I want to be honest with you people. I should not be telling you this, but the banks are operating under difficult circumstances right now. As we speak, some of the foreign banks are closing our offshore accounts, with the Bank of China being an example. The reason why I do not tell you some of the things is that you would panic . . .
Afreximbank is the only bank in the world that has been helping us,” Mangudya said.

Afreximbank are guarantors of the $200 million export incentive facility, where exporters will get an additional 5% in a bid to boost local production.

Exports are the biggest source of liquidity, constituting 60% of cash flow.

Mangudya said since 2009, Zimbabwe had experienced a $2,5 billion trading deficit per annum, meaning to date the country has lost $20 billion.

“Our situation is even worse because we are using a reserve currency for both local and foreign transactions, which is unsustainable. RBZ imports between $10 and $15 million cash weekly on top of what is imported by banks to meet the requirements of the market,” financial expert, Persistence Gwanyanya said.

“Ideally, this money should be used for foreign payments and that’s the reason why RBZ now wants to introduce bond notes, so that they take care of local payments, while minimising the occurrence of externalisation, as one cannot use the bond notes outside the borders of Zimbabwe.”

So dire is the situation that banks have been forced to dip into the nostro accounts to satisfy the United States dollar market on top of making foreign transactions.

A nostro account is an account that a local bank holds in foreign currency in another bank.

The money held within that account acts as a reserve for the local bank in case it runs out of cash.

The depleting nostros have jolted RBZ into action and is set to receive $545m in nostro stabilisation facilities.

Analysts have urged Zimbabwe to use the South African rand, which is easily accessible.

However, Mangudya said the regulations in place in South Africa do not allow for easy adoption of the rand.

“If we say we are going to be using the rand, we have to be part of what is called a common market area or the rand zone. For you to join the rand zone, there are two things that should happen. Right now, the common market area has four members: South Africa, Lesotho, Swaziland and Namibia,” he explained.

“Each of these economies’ currencies are backed by the rand, so for Zimbabwe to use the currency, we must have the Zimbabwean dollar, which we are not ready for because the conditions for the Zimbabwean dollar to come back are not there.”

23 Comments

  1. But Mangudya one thief said 430 million dollars he stole from ZIMDEF is a drop in the ocean, so this ocean is so dry eh? ZanuPF must swallow its pride and open up the country to investament stop its war against anybody and anything which disturbs their looting. ZanuPF have the Chimoio mentality thinking they are still at war base. Mugabe must act on corruption because the liquidity crisis s also caused by his people who are siphoning hard cash from the country to start business outside Zmbabwe. These same people don\t pay salaries to their workers locally so the local busness cannot boom with slave labour.

  2. thats why you lost in Norton…Bring them and you will lose 2018…You think Zimbabweans are stupid to accept toilet paper whilst you take our dollars to buy mensions

    1. Kwanzi iye Mangudya wacho haatomboziviwo kuti mabond notes anenge achishanda sei

      1. Kkkkkkkkkkkk hya zvairi circus chaiyo.

  3. Dr John Mangudya please get real and stop treating us like idiots. “one of the reasons why there was a liquidity crisis was that the country was double-dipping”, he makes it sound like we the people of the country are double dipping. The reality is that the GVT/RBZ is taking our exporters real USD to use for payments, and then issuing IOUs (T Bills) or RBZ overdraft to credit the exporters with RTGS dollars (or put some numbers in your bank account).

    How and when will this domestic debt ever be paid back? This is the voodoo magic of the RBZ, they can magically make USD100million export money into $200million. It does not heed the laws of economics, and it will come crashing down, and it will be the country (us) that will pays the price.

    The bond notes can not solve this situation, they will fail, not because we the people will make them fail, but because they defy the laws of economics. The currency requires trust in order to succeed, and trust is an old fashioned word and is earned the old fashioned way, it cannot be legislated or coerced. If you want to earn some trust start by publishing the Afreximbank guarantee details, if it exists at all, secondly make a legal contract with the country (us the people) that only $200million bond notes will be issued, and that if the issued amount exceeds the $200million, that the government with step down for lying to the country and destroying the economy.

    I know its all wishful pie in the sky stuff, ZPF has no intention of going straight…

  4. All these “senior chefs” think we, the povo, are stupid. They can go to hell. The bond note story is all lies – they do not have them, they will not have them, bvecause they know that they will have to flee the country within 24 hours of the bond note being issued in Zim. These ‘senior chefs’, including ol’ grandpa no longer have ANY idea of how to put this country back together again. They are completely brainless. In the meantime, they will continue to steal every last US$ that comes into this country.

  5. bring back $15bn our economy will be on a roll. stupid mangundya

  6. bataika munhu akaora $15billion kwete kuswera uchitaura zvisina basa izvo

  7. bataika munhu akaora $15billion kwete kuswera uchitaura zvisina basa izvo

  8. zim is truely on economic doldrums

  9. zim is truely on economic doldrums

  10. If Mangudya really has $200 miilionwhy not bring it into circulation rather than mufananidzo wayo in the form of bond notes

  11. They have already spent it on tear gas and anti riot vehicles so that we cannot ask what happened to the US$15billion that has disappeared…

    The irony is we pay for the tear gas and the riot police salaries for them to abuse us when we ask for accountability.

  12. Mangudya is talking nonsense because he was at the RBZ in 2009.

    1. If you can print US200million in bond notes, why not have/have us200million in Zimbabwean dollars. whats the difference. hiding behind a finger??

  13. i really wonder why Mr Mangudya (and all Zanu PF top brass) just for once spare Zimbabwe from utter destruction? Why make millions suffer simply because you have an ideology that makes us suffer? Arent you humans with feelings for humanity? I think you simply dont care what happens-Handiti? If Zimbabwe is wiped out from the face of the earth by hunger,diseases and pestilences you dont care? Its true dictators have a very very unique personality-you cant just be a dictator you are born a dictator! Because if they are like us the ordinary humans-they could have changed or found some alternatives to save Zimbabwe. I think for Mangudya its BOND NOTES and you cant tell him otherwise and for Mugabe its the WEST and SANCTIONS and you cant tell him otherwise. Thats what they are they have a strong sense of INFALLIBILITY (they cant be wrong)Thats DICTATORS. I think you all know the language they understand-Violence………..

  14. i really wonder why Mr Mangudya (and all Zanu PF top brass) just for once spare Zimbabwe from utter destruction? Why make millions suffer simply because you have an ideology that makes us suffer? Arent you humans with feelings for humanity? I think you simply dont care what happens-Handiti? If Zimbabwe is wiped out from the face of the earth by hunger,diseases and pestilences you dont care? Its true dictators have a very very unique personality-you cant just be a dictator you are born a dictator! Because if they are like us the ordinary humans-they could have changed or found some alternatives to save Zimbabwe. I think for Mangudya its BOND NOTES and you cant tell him otherwise and for Mugabe its the WEST and SANCTIONS and you cant tell him otherwise. Thats what they are they have a strong sense of INFALLIBILITY (they cant be wrong)Thats DICTATORS. I think you all know the language they understand-Violence………

  15. Iwewe ndiwe wakadzikisa ma Nostro balances from 30% to 5%….ndiwe wakakonzera liquidity crisis udza banhu chokwadi mhani.

  16. The fact that politics is interfering with the running of the economy it is a clear sign that we are in a predicament.Now they wanted the bond notes to be printed in Germany and it refused because of the previous hyperinflation case.They know they will be held responsible to an extend .Zanu comics have failed us everything is coming to a standstill position. Mangudya has failed ,tell the government to change their policies varegedze kutuka vanhu vaite friendly nevanhu.Tiitirei easy.

  17. SIMBOTI WE ZAMBE

    WE ARE SEEK AND TIRED OF YOU JOHN ,THE HONOURABLE THING FOR YOU TO DO IS TO RESIGN,URI KUTEDZA MUTSOKA DZA GIDEON GONO DZEMA BOND NOTES .YOU ARE NOT INNOVATIVE AND YOU CAN ONLY WORK FOR SOME ONE.YOU POSITON NEEDS SOMEONE WHO CAN THINK OUTSIDE THE BOX NOT ZANU PF TO THINK FOR YOU .WE ARE NOTHING IF WE DONT HAVE OUR OWN CURRENCY THERE IS NO SOVEREIGNITY,YOU ARE JUST BARKING DAY IN DY OUT.

  18. Ko,nhai Vasco Da Gamma akarega kufamba famba kwaari kuita,hamuone kuti mari inoitwa save. Then toona kuti vaiita loot during the DRC era vatorerwa ma properties avo, zvese totengesa. Totevera mbavha dzeku Marange—–eeeeeeiisshhh, I forgot!! Mbavha dzacho masoja ari kutotaura havo kuti Mugabe haaende!!! Mati madiiii!!!&

  19. If bond notes are an export incentive then why bringing it yet we have nothing to export sine we are not producing? This is all nonsense don’t play with our minds.

  20. I wish you can roll the bond notes once and come 2018 you feel the heat, infact you have delayed.

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