eBusiness Weekly
Enacy Mapakame
HARARE – Government needs to address the ballooning RTGS balances, as there is a current mismatch between the RTGS and actual money in circulation.
Financial markets experts who participated at the recently held fifth Zimbabwe Financial Markets Indaba held in Sandton in South Africa agreed the RTGS balances were unhealthy to the economy.
According to the delegates, the ballooning RTGS balances and Treasury Bills (TBs) were unsustainable and inflationary.
“What we have in the bank and the actual notes and coins we have do not tally, if Government keeps giving treasury bills this will become a problem.
“Government needs to do something about RTGS balances,” said Untu Capital CEO Clive Msipha at the conference.
Generally, the delegates said there was positive investor confidence and the country was on its path to recovery if the current positive sentiment was maintained in the next few years.
However, the TRGS and TBs issue coupled with currency risk were a cause for concern for potential investors.
In his 2018 National Budget, Finance and Economic Planning Minister Patrick Chinamasa admitted one of the economy’s key challenges was the unsustainable budget deficit, whose financing through issuance of TBs and recourse to the overdraft with the central bank untenable.
This, he said, was also at the core of factors driving demand for foreign exchange, as well as creation of excess money supply, largely in form of electronic and mobile balances.
As at June 2017, the stock of TBs and bonds had hit $2, 5 billion.
