Speaking during the Daily News Business Breakfast Forum, “Implications Of The New Currency” on Monday morning, Reserve Bank of Zimbabwe (RBZ) governor John Mangudya outlined the implications of the introduction of local currency. He said:
- Stability on the interbank foreign exchange market as more foreign currency is sold through formal channels. As at end of June 2019 US$664 million had been traded.
- Reduction of trading of foreign currency on the parallel market.
- Stronger demand for local currency, which strengthens its value.
- Halting of costly re-dollarisation – economic agents were reverting to use of US dollar as the unit of account and medium of exchange;
- Improved monetary policy effectiveness – use of monetary policy in instruments to control inflation and maintain price stability going forward;
- Retention of foreign exchange accounts (current Nostro deposit position around US$1 billion or around $3 months import cover) to boost economic activity in the country;
- Restoration of confidence in the economy as measures yield positive results;
- Creation of certainty which assists business in planning and decision making
- Creation of scope for increased production and productivity – low production is the major challenge facing the economy.
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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