Government to extend a further US$150 mln to RBZ for recapitalisation
GOVERNMENT is set to extend $150 million to the Reserve Bank of Zimbabwe on top of the $100 million previously availed to them for capitalisation.
Finance and Economic Development Minister Patrick Chinamasa told a press conference to unveil the new RBZ Board that the central bank’s current liquidity levels do not allow it to fully conduct its role.
“We extended $100 million previously to the RBZ in order to capitalise them but the funds are inadequate. We hope to do more and give them another $150 million that will fully capitalize it so that it fully start its function to be lender of last resort,” he said.
Chinamasa said in addition to that Government adopted the central bank’s $1.35 billion debt in a bid to clean its balance sheet and restore confidence in the banking sector. The Debt Assumption Bill has already been passed in Parliament and is awaiting Presidential assent.
In the meantime however, work to restore confidence has already started with the resumption of the RBZ’s role of banker to Government, the demonetisation of Zim dollar balances, resumption of the interbank facility, Zamco, and the introduction of bond coins.
Chinamasa said Government has been working tirelessly to restore confidence in the economy which was badly affected by the hyperinflation period as well as the inability to honour international obligations.
“We are still not able to honour our obligations, but we are satisfied with the progress we have made to restore our economy back on track,” he said.
He added that Government is laying in place a sound policy framework which could usher economic recovery.
Chinamasa said the new RBZ board has diverse background and experience which will add value to the bank.
“Individually you are nothing, you will not be able to do any work. So you will be responsible for advising the Governor on monetary policies. I acknowledge that the scope is limited because of the current environment but I believe you will do your best.
RBZ governor John Mangudya is the chairperson. He will be deputised by economist Rita Likukuma.
Other members are Virginia Mudimu (lawyer), Aaron Maboyi (Ambassador) Michael Zvikomborero
Nyabadza (Anchor Yeast), Joe Mutizwa (business executive), Onesime Jacob Mukumba (former CFX chief executive) Cornelius Maradza (former ZDB), Pauline Chapendama (prisons and correctional service commissioner) and Lazarus Murahwa (banker).
Mangudya said the central bank will do its best to steer the economy forward adding that the current condition was stable. “What is now required is to go beyond the stability. We need to thrive hard as an economy to ensure that we increase production as this is going to be the essence of development. From now onwards, we want to move with policies that resuscitate the economy.