'Mangudya should find ways to end cash shortages'

'Mangudya should find ways to end cash shortages'
Published: 02 August 2017
THE Reserve Bank of Zimbabwe (RBZ) governor, John Mangudya should announce a raft of measures on how he will address liquidity challenges, as well as domestic debt, when he presents his mid-term monetary policy review statement today, analysts have said.

Mangudya's monetary policy comes at a time when the country is battling severe cash shortages, with banks having introduced daily withdrawal limits of as little as $10.

"The monetary policy must address issues around cash shortages, how best to deal with the challenge," Bulawayo-based economic analyst, Reginald Shoko said.

"He (Mangudya) should also look into the issue causing uncertainty over the increase of bond notes in circulation and also table by denomination bonds in circulation now including the coins."

Shoko said Mangudya must explain the indirect money printing "he is busy doing by continuing issuing Treasury Bills, thereby creating fictitious money".

"And I think he must also declare that he will not use any monetary instruments to take over debts incurred recklessly by State enterprises," he said
Economist, Godfrey Kanyenze echoed similar sentiments saying the economy cannot grow without adequate liquidity.

"Mangudya should tell us how the challenge of cash is going to be addressed, and particularly what will happen with the bond notes. How are we going to end liquidity challenges?" he said.

Kanyenze said since about $25 million was left from the $200 million Afreximbank facility, Mangudya should tell the nation the way forward.

"Are we going to extend the facility with Afreximbank or not," he said.

Kanyenze also said the RBZ governor should address the issue of domestic debt currently at around $4 billion.

A banker who preferred anonymity said Mangudya has very little room to manoeuvre because the country is using foreign currency.

The banker said a monetary policy is all about interest rates and exchange rates, but Mangudya can not do much on the exchange rate side because Zimbabwe is not using its own currency.
- newsday
Tags: Mangudya,


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