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Central bank governor John Mangudya on Friday addressed a Daily News Breakfast meeting on the MPS2019. Below are some of the major highlights from Mangudya’s delivery:
- The MPS2019 means something for everyone. For the first time, there is clarity on prices and exchange rate.
- The street rate is way too high coz there is a risk premium(You can go to jail for 10yrs).
- We will reward exporters by giving them fair value for th portion of their forex which we retain.
- I am guilty as charged. Taking exporters’ money at $1:1 when prices had risen by 3 or 4 times was unfair.
- For forex dealers in the streets, they now have an opportunity to open formal beaurue de changes and trade formaly.
- Bond Notes came into effect to formalise the export incentive. The 5% incentive scheme was a shadow exchange rate. It went on well when inflation was below 5%. When the inflation went beyond 20% all hell broke loose.
- The Bond Notes+Coins is the fiet currency of the RTGS Balance in the same manner that physical USDs are a fiet currency of your dollars in th nostro account.
- The delay of the MPS was because we were taking our time to analyse all submissions.
- We will arrange foreign lines of credit since demand will be greater than the supply of forex. We need to cloud seed the market with forex.
- The RBZ will play in the Open Market by buying when the rate is low and sale when the rate is high.
- The rate will open at $1: 2.50(RTGS) as per agreement with forex dealers in the Banks.
- All import invoices have to be resubmitted to the Banks since we are starting a new thing all together- Dr Mangudya.
- The RBZ will open a window as a Lender of Last resort inorder to protect market players who are short.
- After setting up the Lender of last resort window, we will come up with a Bank Rate(Repo Rate) which will guide interest rates in the market.
- We need to strike a good balance to make the market to continue to grow and avoid treading into a recession.
John Panonetsa Mangudya is an economist and the current Reserve Bank of Zimbabwe governor. Mangudya, who sits on many local and international boards .He was made RBZ governor after the expiry of Gideon Gono's term in 2014. He had been CBZ Holdings Ltd Chief Executive... Read More About John Mangudya
Real-time Gross Settlement (RTGS) is a fund transfer system where the transfer of money takes place from one bank to any other bank on a "real time" and on a gross basis. Settlement in "real time" means a payment transaction is not subjected to any... Read More About RTGS