eBusiness Weekly
HARARE – The Reserve Bank of Zimbabwe (RBZ) on Wednesday took major steps towards liberalising the foreign currency market to attract investment into the country and announced a cocktail of measures aimed at assisting productive sectors of the economy enhance capacity to boost export earnings.
In its first-half monetary policy statement (MPS), running under the theme, “Enhancing financial stability to promote business confidence,”
RBZ Governor, Dr John Mangudya said the country’s top imperatives were to improve the business climate to attract investment and drive export earnings.
Zimbabwe has in the past few years battled cash shortages that have primarily been fuelled by, among other things, high imports against low forex generation, low foreign direct investment and externalisation.
“The bank is convinced that by opening up the economy for business, the country has struck the right cord for sustainable transformation of the economy,” Dr Mangudya said.
“It is in this optimistic context that the bank is coming up with measures to gradually open the foreign currency market in order to restore investor confidence within the economy under the new narrative to open Zimbabwe for business.”
This is the first Monetary Policy Statement to be presented under a new government led by President Emmerson Mnangagwa who came to power last November and has to date taken bold steps to re-connect Zimbabwe to the world as a country that is “open for business.”
To attract investment, Dr Mangudya said the RBZ is working with the African Export-Import Bank on a $1.5 billion facility to provide guarantees for investments coming into the country and for liquidity support.
“Such guarantees and liquidity support are necessary to protect investors’ funds from country risk, and in doing so, enhancing investor confidence,” Dr Mangudya said.
The central bank is establishing an offshore financial service centre within the context of Special Economic Zones that government is pushing for.
“The legal framework is built on providing investors with supportive policy environment and guidelines to pursue various investment options in the financial service centre,” the central bank boss said.
The Reserve Bank also maintained the foreign currency retention level for all businesses within the 14 days from receipt of funds, at 100 percent except for gold, diamond, platinum, chrome and tobacco producers.
Forex retention for privately owned diamond firms, platinum and chrome producers was increased from 20 to 35 percent. – New Ziana
