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Minister Chinamasa

THE government plans to inject an additional $150 million into the Reserve Bank of Zimbabwe to enable it to fully carry out its role as a lender of last resort and help ease the liquidity constraints in the country.

Finance and Economic Development Minister Patrick Chinamasa told journalists at the announcement of the new RBZ board yesterday that the $100 million that was put towards recapitalising the central bank last year was not enough.

“We’re under obligation to recapitalise the bank. Primarily we’ve already recapitalised it to the tune of $100 million. That’s not adequate, we hope to do more and give it another shot in the arm of about $150 million that will fully capitalise it so that it starts its function to be the lender of last resort,” he said.

The country has been struggling under tight liquidity conditions since the introduction of the multi- currency regime in 2009, which has resulted in high interest rates. The government has expressed hope that these can be lowered by the resuscitation of an interbank market anchored by a well-capitalised central bank.

Minister Chinamasa said the restoration of the central bank’s role of banker to government in July last year and the commencement of interbank activities in February this year among other measures, had helped to restore confidence in the financial services sector.

He said the clean-up of commercial banks’ balance sheets through the creation of the Zimbabwe Asset management Corporation (Zamco) and the demonetisation of the Zimdollar balances has also helped.

The new RBZ board is chaired by the central bank governor John Mangudya and Rita Likukuma is his deputy. The other board members include Virginia Mudimu, Aaron Maboyi, Michael Nyabadza, Joe Mutizwa, Onesime Mukumba, Cornelius Maradza, Pauline Chapendama and Lazaraus Murahwa.

Central bank deputy governors Charity Dhliwayo and Khupukile Mlambo were also appointed as ex-officio members of the board and the final member representing the ministry of finance is yet to be announced.

Minister Chinamasa said the new board should work as a team to deliver its mandate despite the limited scope they have to work in. RBZ governor and chairman of the new board Mangudya said the new board needs to work hard to build bridges and grow the economy.

“I believe this economy is in a stable condition and what’s required is to go beyond stability. We need to thrive, to ensure that we increase production in the economy, which is going to be the essence for the development of this country,” he said.

The board replaces the one that was chaired by former RBZ governor Gideon Gono whose tenure expired in April last year. – BH24.