‘Tight exchange rate policies only way out’

Michael Tome
Business Reporter
THE Government should continue crafting instruments that tighten exchange rate policies to enhance confidence levels in the economy, FBC Holdings Limited chairman Herbert Nkala has said.

Allocation of foreign currency through the foreign exchange auction system has contributed to improved confidence and growth in economic activity since its inception in June 2020.

Zimbabwe foreign currency auction system came as a platform to boost transparency and efficiency in the foreign currency market.

In a statement accompanying FBC Holdings Limited’s half year results to June 2021, Mr Nkala acknowledged the positive outcomes of the foreign currency auction system saying it has stabilised the economic environment since inception.

“Exchange rate policies have been effective and must be continued in order to enhance confidence and improve macroeconomic conditions.

“The foreign exchange auction system has contributed immensely in bringing about transparency in the trading of foreign currency as well as stability to the exchange rate which has culminated in price stability,” said Mr Nkala.

He however, bemoaned the effects of the Covid-19 induced lockdown indicating they countered the Group’s full potential in the first six months to June despite extensive adoption of working conditions that promoted social distancing.

“Successive episodes of lockdown measures have culminated in the adoption of remote working arrangements with reduced business operating hours militating against the Group’s capacity to aggressively grow revenue lines across business segments,” added Mr Nkala.

Attributable to the negative impact of Covid-19, the Group registered a profit after tax of $529 million from $3,3 billion recorded in the prior comparable period translating to an 84,1 percent decline.

The Group’s revenue closed the period under review at $3,1 billion an increase from $1,9 billion recorded in the same period in 2020.

Net interest income stood at $1,33 billion a 43 percent growth from $932 million buttressed by the Group’s 12 percent growth in loans and advances.

In spite of the Covid-19 related limitations net profit from property sales at $50 million jumped by 350 percent a significant growth attributed to improvement in pricing and increased number of units sold.

This comes on the back of the Group’s amplified drive on the building society segment backed mainly by significant progress in Fontaine Ridge project in Harare.

FBC Building Society construction activities are currently in progress at the 858 units Kuwadzana project in Harare with 150 units under phase 1 having already been commissioned hitherto.

According to FBC, their banking segment continues to demonstrate resilience to various shocks and dynamics buoyed mainly by the group’s accelerated digital transformation drive.