RBZ Accused Of Undermining Economic Recovery

4 years agoMon, 29 Apr 2019 04:19:34 GMT

RBZ Accused Of Undermining Economic Recovery

An economic commentator has accused the Reserve Bank of Zimbabwe of sabotaging the economy through its vice-like grip on the allocation of scarce foreign currency through its network of patronage.

In a column for Newsday, Eddie Cross claimed that the destructive role of the RBZ started during the Gideon Gono era and has been continued by his predecessor John Mangudya. He writes:

Under the new dispensation, the first sign of trouble came in the monetary policy statement issued by RBZ governor John Mangudya just before Christmas.

In that statement was a single, short statement that the central bank was to establish a Monetary Policy Committee (MPC) which, in future, would be responsible for monetary policy, independent of the governor and the Minister of Finance.
This is standard practice in all countries with a stable currency. I heard a rumour that this inclusion in the statement has been forced on the governor by the new minister and his team.
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… The struggle intensified in the first quarter of 2019. Eventually, Mnangagwa himself was forced to intervene between the two arms of government and he dictated a compromise.
The result was the Monetary Policy Statement issued five weeks later than promised and containing the words “willing seller, willing buyer”.
Like the sentence including the announcement of the formation of the MPC, this was included over the strong objections of the RBZ.