The Sunday Mail
Golden Sibanda
Youth empowerment advocacy group, Upfumi Kuvadiki, has hailed monetary policy measures being undertaken by the Reserve Bank of Zimbabwe, saying they are appropriate in addressing the issues besetting the economy.
Upfumi Kuvadiki president, Mr Pedzai Sakupwanya told The Sunday Mail Business in an interview that measures being undertaken by the central bank, including earlier introduction of bond notes as an incentive to exporters, were appropriate interventions to grow productivity and exports. He said this will earn the country the much needed hard currency.
Mr Sakupwanya also commended the recent separation of nostro foreign currency accounts and real time gross settlement (RTGS) foreign currency accounts in restoring market confidence to encourage inflows and banking of hard currency.
The central bank interventions will be supported by several fiscal measures, including cutting excessive public expenditures to contain fiscal deficits, all designed to stabilize and grow the economy.
“The economic challenges that we are facing were not caused by bond notes. According to the RBZ, bond notes as an incentive have done very well as evidenced by the significant growth in exports, which the bank says grew by 36 percent in the first half,” Mr Sakupwanya said.
Mr Sakupwanya said evidence shows that exports of tobacco have grown to a record high of 250 million kilogrammes while gold also set a record figure of 28 tonnes on the back of the bond note export incentive.
“So the bond note is greatly assisting the export sector, which is what the economy needs, more exports and more production.
“ Again, people need to know that inflation is caused by excessive money supply and not bond notes. In the case of our country, the central bank has said money supply is caused by fiscal imbalances, which the Government has committed to control,” he said.
His remarks come after the central bank on October 5 introduced a raft of measures to strengthen the multi currency system, including directing banks to separate nostro and RTGS foreign currency accounts and tightening a number of foreign exchange rules.
Mr Sakupwanya said they had assurance from the central bank that the recent monetary policy measures were meant to preserve value of currency, keeping US dollar and bond notes at a rate of 1 to 1 and giving confidence to exporters.
The central bank has secured half a billion dollars from the Afreximbank to guarantee the ready availability of funds in nostro FCAs as and when required.
“So this is good for everyone. This is a great improvement by the Reserve Bank,” he added.
