The Reserve Bank of Zimbabwe (RBZ) has moved to allow companies to purchase up to US$100 000 per week from local banks for purposes of undertaking bona fide payments and moved to maintain the current interest rates in a bid to preserve stability.
Presenting the resolutions made by the Monetary Policy Purchase up to US$100 000 per week (MPC) on Friday, RBZ governor John Mangudya said the measures are coming on the back of tangible economic gains birthed by measures put in place in the recent months.
“The MPC agreed to further liberalize the foreign exchange market by increasing the maximum amount that entities can purchase from banks for bona fide foreign payments under the willing-buyer willing-seller system from the current level of US$20,000 to US$100,000 per week per entity,” he said.
Market watchers believe that the move will increase the companies access to foreign currency as it aids other already existing sources of the greenback. Notably, local companies can still access foreign currency from the RBZ Auction platform and through internally generated US$ sales and these strategies combined will lead to increased access to raw materials and overall economic productivity growth.
The top economist, Persistence Gwanyanya this week told a local publication that the increase of accessible thresholds will further strengthen the markets.
“The policy initiative which now allows a single entity to access US$100 000 will go a long way to ease pressure from the auction market, effectively placing the central bank to its mandated role of being a regulator in the market.
“It will also allow more time to focus on other pertinent issues which when all combined, will strengthen the foreign exchange market,” he said.
The MPC also moved to maintain high interest rates at current levels of 200% and 100%, respectively saying they will only be eased once durable stability is achieved as determined by measurements confirming a sustained decline in month-on-month inflation to desired levels of less than 5%.
This means that 200% and 100% interests’ rates respectively shall continue to be charged on loans extended by banks.
While some companies have criticized the high interest rates as exorbitant and unsustainable, the policy measure has been hailed by many for its impact in arresting speculative, double – dipping borrowing which was used to finance parallel market activities which in turn catalyzed inflation.
