Bankers laud Monetary Policy Statement

Harare Bureau
THE Bankers Association of Zimbabwe (BAZ) has lauded the latest Monetary Policy Statement (MPS) issued by the Reserve Bank of Zimbabwe (RBZ) for laying a solid framework for continued stability and economic growth.

Under the latest framework the RBZ, among other strategies, increased its bank policy rate, against which banks benchmark interest rates, from 35 to 40 percent, as a means to buttress and preserve economic stability.

BAZ president, Mr Ralph Watungwa, said the Apex Bank must be commended for fostering financial stability through prudent policy interventions. He applauded the RBZ for strengthening of the Financial Intelligence Unit, among other measures.

“Generally, I am encouraged, I think the Governor has managed — with the tools that he has to stay on course and to be able to do his part to ensure that we stay on course . . . but going forward it has to be all ‘hands on deck’ for us to continue to register the growth that we so much need,” said Mr Watungwa. “I would say a fantastic last eight months or so (we have had) and a lot of stability we are seeing on prices and even the worst sort of discussions have stabilised because of the gains we have made particularly on money supply control and also on the auction.

“But what I would say on the first pillar is how do we maintain supply of foreign currency and the Governor has alluded to that by the measures that have been taken (that is) deregulating the 60 days’ liquidation rule but also increasing the surrender (threshold).”

Mr Watungwa said there was a need to encourage exports and make sure local businesses, including smaller ones, are able to export competitively.

“Expanding the exports base in terms of the number of players is very important.”

Mr Watungwa also said the banking sector is in good steady and ready to play its lending role on a long-term basis in order to foster growth.

He, however, noted market perception that interests’ rates are on the higher side, a situation which businesses would want reviewed downwards. But for this to be achieved, Mr Watungwa, said there is need for inflation to further decrease.

“The banking sector is in a good place thanks to the policies that have been put. The one area we believe we are making progress, obviously with our fingers crossed, is the area of capitalisation of banks,” he said.

“I am happy to see that banks capital has grown compared to 2019. So, it shows the policies that were implemented are starting to bear fruit.

“The other good story is that banks, in real terms, have increased their lending, which means that (there is) support for the productive sector, which is important for the turnaround that we anticipate.”