'Govt not interfering with interbank market rate'

'Govt not interfering with interbank market rate'
Published: 01 May 2019
INDUSTRY and Commerce minister Mangaliso Ndlovu, pictured, has allayed fears government is interfering with the interbank market exchange rate saying such accusations are unfounded. This comes after captains of industry called on government to allow free functioning of money markets, amid fears that the interbank arrangement can be manipulated due to lack of clear rules guiding its operations.

"I am quite worried by the assertion that the interbank is not working and the indication that government could be, in any way, behind that.

"Government is not in the parallel market and it will not be in the parallel market," Ndlovu said. Ndlovu said the government cannot address allegations that lack a "grain of evidence", adding that the over emphasis on government manipulation is a distraction.

He challenged the private sector to find each other and be honest with each other to avoid unnecessarily contributing to the decay of the economy. When the interbank market was operationalised, the opening rate stood at 1: 2,5.

"The exchange rate has gone up to above 3 and the black market rate has moved … Where government is involved in this?" he queried.

Last week, Confederation of Zimbabwe Industries (CZI) president Sifelani Jabangwe said it was imperative that government ensures that money and foreign exchange markets operate without government interference.

Jabangwe warned that further delays to allow markets to operate without interference will work against the good of the manufacturing sector and the economy at large. "There are also concerns that the regulatory hand is determining the foreign currency exchange rate on the interbank platform, hence it is not viewed as a rate determined by willing-buyer willing-seller trades," he said.

Jabangwe also highlighted that the interbank starting rate was too low resulting in more buyers than sellers. "With a commodity that is in short supply if you go in at the low end of the price as what is happening, you will have a lot of buyers because it's a deal but sellers will not be there because they are being short changed. I believe this is what is happening," he said.
- dailynews
Tags: Interbank,


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