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RBZ Governor John Mangudya

Harare Bureau
RESErVE Bank of Zimbabwe Governor John Mangudya will today present his Monetary Policy Statement with focus on stabilising the banking sector and measures to ensure growth of exports and harmonising monetary instruments for economic growth.

Mangudya said while the banking sector has registered improvement in stability, focus should now be on the growth of the financial services sector.

“I’m happy to tell you that banks are in a stable condition. We’ve seen an improvement in the stability of the banking sector. We said by the end of June we don’t want ailing banks and this is true.

“If anyone tells you otherwise that person has no authority to say what they’re saying. We’re the only ones as monetary authorities who do the deep stick to see whether the banking sector is stable or not stable,” said Mangudya.

After stabilisation focus moves to growth.

He said the second phase will deal with amendment of the Banking Act.

Amendments to the Banking Act will include introducing a Credit Reference Bureau, but most importantly it will introduce penalties for bank owners who run financial institutions down.

“The whole idea is to ensure that going forward we don’t have banks, bankers and businesses that are undisciplined. We also want to ensure companies grow. Why are we talking about production as the central bank? It’s because we don’t print the US dollar. So our printing press is in industry, we print from exports, Diaspora remittances, loans and from FDI. Those are our four printing presses and therefore anything that disturbs production is our enemy,” he said.

Mangudya said some of the problems were a result of the country using instruments that were instituted in the 1970s, which are now inconsistent with the current liberalised foreign exchange system.

He said he will have a page on harmonising economic instruments.

Mangudya said the challenges that the country is going through were the aftermath of the transition from the Zimbabwe dollar era to the multi-currency system.

“The challenges that this economy is facing are the aftermath effects of the transition from the Zimdollar era to the US dollar because no one was prepared for that,” said Mangudya.

“With the US dollar we’re now exposed. Companies are now forced to borrow to finance salaries and operations,” said Mangudya.