We have your backs: RBZ chief

The Sunday Mail (Zimbabwe) - - FRONT PAGE - Lin­coln Towindo and Liv­ing­stone Marufu

THE Re­serve Bank of Zim­babwe has in­creased for­eign cur­rency al­lo­ca­tion for ba­sic and es­sen­tial com­modi­ties to cur­tail threats of short­ages.

Cen­tral bank gover­nor Dr John Man­gudya said the in­jec­tion of ad­di­tional for­eign cur­rency comes on the back of mar­ginal in­creases in prices of goods and com­modi­ties in most shops in Harare, where fears of short­ages rem­i­nis­cent of 2007 have swelled.

This has trig­gered panic buy­ing and il­le­gal mon­e­tary trans­ac­tions.

How­ever, Dr Man­gudya dis­missed sug­ges­tions that most ba­sic com­modi­ties are be­gin­ning to dis­ap­pear from shop shelves.

He said the cen­tral bank is al­lo­cat­ing an ad­di­tional US$30 mil­lion a week for ba­sic and es­sen­tial com­modi­ties im­por­ta­tion with an ad­di­tional US$15 mil­lion be­ing spent on fuel and elec­tric­ity im­ports.

He said the avail­abil­ity of for­eign ex­change has re­mained sta­ble due to grow­ing im­ports.

Fur­ther­more, the RBZ will this week in­tro­duce a US$600 mil­lion Nostro Sta­bil­i­sa­tion Fa­cil­ity from Cairo-head­quar­tered African Ex­port Im­port Bank (Afrex­im­bank) to start ad­dress­ing the for­eign cur­rency short­age on the mar­ket.

This nostro sta­bil­i­sa­tion fa­cil­ity is meant to deal with on­go­ing de­lays in the pro­cess­ing of for­eign pay­ments by banks for the pro­cure-

ment of pro­duc­tive im­ports as part of a raft of mea­sures to sta­bilise the econ­omy.

The fa­cil­ity will cover the for­eign cur­rency gap that widened af­ter clo­sure of the 2017 to­bacco mar­ket­ing sea­son.

RBZ ex­pected for­eign ex­change re­ceipts from plat­inum and chrome to be treated in the same man­ner as gold, di­a­monds, to­bacco and cot­ton to en­sure that the nostro sta­bil­i­sa­tion fa­cil­ity is sup­ported by a con­tin­u­ous stream of ex­port re­ceipts.

An­other ex­port in­cen­tive scheme worth $300 mil­lion is ex­pected to help the sit­u­a­tion.

Last week, the RBZ chief was ex­pected to sign a Mem­o­ran­dum of Un­der­stand­ing with top Afrex­im­bank of­fi­cials who were in the coun­try on of­fi­cial busi­ness.

Re­spond­ing to ques­tions from The Sun­day Mail, Dr Man­gudya said: “We are mak­ing sup­ple­men­tary al­lo­ca­tions of US$30 mil­lion on a weekly ba­sis for ba­sic and es­sen­tial im­ports. “Specif­i­cally, fuel is get­ting US$10 mil­lion per week, US$4 mil­lion per week for cook­ing oil raw ma­te­ri­als, US$5 mil­lion to­wards elec­tric­ity and around US$2 mil­lion for phar­ma­ceu­ti­cals.

“Noth­ing ma­te­rial has changed in the avail­abil­ity of for­eign cur­rency. To the con­trary, ex­ports have gone up.”

In a state­ment ear­lier, the RBZ also con­tested so­cial me­dia re­ports in­sin­u­at­ing that Fi­nance and Eco­nomic De­vel­op­ment Min­is­ter Pa­trick Chi­na­masa had or­dered the print­ing of more bond notes in or­der to chase the US dol­lar in il­le­gal trans­ac­tions on the streets.

“The in­ten­tion of so­cial me­dia (abusers) is to con­fuse the mar­ket through in­still­ing fear in peo­ple.

“Zim­bab­weans should refuse to be hood­winked by fake so­cial me­dia state­ments de­signed to in­crease pre­mi­ums on the par­al­lel mar­kets by mis­guided rent seek­ers.”

Dr Man­gudya as­sured the na­tion that: “There are no short­ages of ba­sic com­modi­ties.

“On the con­trary, for­eign ex­change cur­rently be­ing al­lo­cated for ba­sic and es­sen­tial com­modi­ties has been in­creased to en­sure that short­ages of com­modi­ties do not oc­cur within the econ­omy.

“In ad­di­tion, the Min­is­ter of Fi­nance and Eco­nomic De­vel­op­ment did not print bond notes to buy US dol­lars from the streets.

“Such ma­li­cious state­ments are counter-pro­duc­tive and are meant to sab­o­tage the econ­omy that is on the re­bound on ac­count of the good agri­cul­tural out turn, strong per­for­mance of the min­ing sec­tor and the re­cov­ery of the man­u­fac­tur­ing sec­tor.”

On the nostro sta­bil­i­sa­tion fa­cil­ity, Dr Man­gudya said: “The board of di­rec­tors of Afrex­im­bank had its board meet­ings in Harare from 21 to 23 September 2017. We ex­pect to sign the MoU on the dis­burse­ment of the US$600 mil­lion nostro sta­bil­i­sa­tion fa­cil­ity to­day (yes­ter­day).

“Gov­ern­ment is also hand­ing over a prop­erty that has been do­nated to Afrex­im­bank.”

There has been a no­tice­able in­crease in the prices of some com­modi­ties over the last few weeks in many re­tail shops with play­ers in the sec­tor at­tribut­ing the surge to for­eign cur­rency short­ages.

Dur­ing the past few months, the green­back has been scarce on for­mal fi­nan­cial av­enues, but ac­ces­si­ble on the in­for­mal mar­ket where it is be­ing sold for a pre­mium. This has re­sulted in il­le­gal cur­rency deal­ers ask­ing for at least $135 in bond notes for one to ac­cess US$100.

Elec­tronic money trans­fers for the high­est United States de­nom­i­na­tion are be­ing pegged at about $150. Sug­ges­tions are that the cost of im­port­ing some goods or raw ma­te­ri­als has in­creased due to for­eign cur­rency short­ages, sub­se­quently push­ing the costs of pro­duc­tion and prices up.

Pic­ture: Be­lieve Nyakud­jara

Mo­torists queue to re­fuel along Samora Machel Av­enue in Harare’s Eastlea sub­urb yes­ter­day with some fill­ing up drums and con­tain­ers for stock­ing. Fake so­cial me­dia mes­sages have been spread­ing false­hoods of an im­pend­ing short­age of fuel and ba­sic com­modi­ties.

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