Business publication, newZWire has listed 5 things to watch for in today’s monetary policy:
1. Currency reform
There have also been rumours that the government is set to introduce a new local currency. Even though the officials have vehemently denied this. What will be the official position announced today?
2. Floating the rate
The current 1:1 official exchange rate of the RTGS balances to the USD is clearly not sustainable. This week an RBZ official was quoted as saying that government accepts that the “official one-for-one peg to the dollar isn’t working.”
Will the bank float the rate? Will it fix it at a new rate of 1:4 based on the current market rates?
3. RTGS Balances
RTGS balances in Zimbabwe currently stand at $11 billion. Some analysts have suggested that the RTGS deposits could stabilise, and even firm, against the U.S dollar, as long as the government keeps a tight leash by not overspending (issuing of Treasury Bills and the bank overdrafts).
What measures will the RBZ put in place to keep this tight leash? Or will they loosen the leash?
4. Forex retention
Under the retention police, “RBZ keeps a portion of the earnings of exporters – 45% of earnings from gold miners – and pays the rest in local RTGS. This has hurt many exporters, and the CZI expects industrial capacity utilisation to fall this year.”
Will the RBZ introduce some adjustment to this policy in order to not continue undermining output by the affected export businesses?
5. Debt repayment plan
Zimbabwe needs to clear its external debt with the World Bank and African Development Bank, which Ncube said US$2 billion would be used to pay arrears this year.
Is Zimbabwe still able to do so given recent disturbances in the country that have resulted in less than warm relations with the west, whose support in clearing the debts was being counted on? Without clearing its arrears, Zimbabwe cannot get fresh debt from these financiers.