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The RBZ’s Focus Is On Price Stability – Mangudya

While addressing a virtual meeting of chief executive officers (CEOs) yesterday, RBZ Governor Dr John Mangudya said the cocktail of measures employed by the government recently are meant to continue to stabilise the economy which will result in the prices of basic goods going down, The Daily News reports.

Speaking at the virtual meeting Mangudya said:

The RBZ’s focus is on price stability. In order to achieve this, we have come up with a two-pronged approach which is about exchange rate management and monetary supply management.
The auction system is being sustained through domestic resource mobilisation, wherein we say 20 percent of commercial transactions are directed to go to the auction system.
This ensures that foreign currency keeps on flowing and businesses are sustained … The exchange rate is gradually stabilising. All bids have been between $80 and $88 for the past three to four weeks.
The average is vacillating within that ruler … and this is not far from the parallel market rate which is around $82 for cash and $90 for transfers
Mangudya speaking about the introduction of the auction trading system said they are not manipulating the system as the regulator but they were just providing the infrastructure and said:
We are not manipulating the system, we are saying bring your own bid and our role is to host the system just like we host treasury bills. We are providing infrastructure and the rules are there to ensure that the process is transparent and accountable. We are re-strategising and putting an end to a random walk. We are trying to abandon the random course and walk towards stabilising the exchange rate in order for prices to stabilise.
Mangudya told the Daily News last month that prices will eventually come down due to the raft measures they are putting in place.

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