‘Set up Monetary Policy Committee’

Michael Magoronga, Midlands Correspondent
ECONOMIST and businessman, Mr Eddie Cross, has hailed Government for abolishing the multi-currency system in favour of the local currency.

Government on Monday scrapped the multi-currency regime and restricted domestic transactions to the Zimbabwe dollar.

In an interview, Mr Cross said the move was the right thing to do and advised Treasury to quickly set up a monetary policy committee to iron out sticking issues.

“I think the Minister and the Governor of the Reserve Bank have the correct ideas but I think they have got the sequencing here wrong. Otherwise what could have happened first was to stabilise the foreign currency market first before abolishing the multi-currency system,” he said.

“What Government should do is to put in place the monetary policy committee as per the Monetary Policy read earlier by the RBZ Governor. The committee, which is now eight months behind schedule, should be in place to formulate policies that assist the abolishing of the multi-currency system.

“That way the move by Government may bear the desired results.”

Mr Cross said stabilising the foreign currency market was going to make the introduction of the Zimbabwe dollar more favourable and easy to embrace.

He said Government must ensure that there is more supply of foreign currency on the interbank market to avoid people going to the parallel market for purchases of forex.

“The RBZ should increase the supply of forex on the interbank market through ensuring that at least 50 percent of the surrender portion of forex is channelled towards the interbank to ensure manufacturers and importers have easy access to funds,” Mr Cross said.

The multi-currency system abolished on Monday by Finance Minister Professor Mthuli Ncube was introduced in 2009 at the height of inflation.