Business / Economy
$4,2bn budget anchored on confidence building strategies
20 Dec 2013 at 04:01hrs | Views
Finance Minister Patrick Chinamasa has presented a $4,2 billion budget for 2014 that is anchored on strategies aimed at restoring connfidence in the economy.
The strategies include the confirmation of the continuous use of the multi-currency system, the commitment by the Government to repay the Zimdollar accounts that were affected by the de-monetisation of the Zimdollar through Treasury Bills and the $100 million injection into the proposed new interbank market so as to revive the interbank activities by the end of January.
The minister also proposed to recapitalize the Reserve Bank of Zimbabwe by 31 March 2014 among other strategies.
Below are some the proposed strategies and how they will affect the growth of the economy.
• $100 million dollars to be injected into the interbank market The minster in his 2014 budget statement said that through the support of Afreximbank, by January 2014, $100 million will be injected into a new interbank market so as to revive a vibrant interbank system. This will facilitate in the creation of money and improve the liquidity condition
• Government to recapitalise the Reserve Bank by 31 March 2014 The minister stated that Government will pay for the RBZ debt by issuing Treasury Bills worth $1.35 billion by 31 March 2014 so as to restore the banks function of the lender of last resort.
• Government to pay Zimdollar account holders Government has made plans to repay Zim dollar account holders who lost their money in banks when the country switched over to the multicurrency system following the hyperinflationary era in 2009.
Minister Chinamasa said $20 million was required to carry out the initiative which would be done through the issuance of Treasury Bills with a Clear 1 capital status to the respective financial institutions for them to further credit back accounts of their clients in their books.
The minister also emphasised that if these confidence building strategies are implemented, the economy by the end of 2014 will grow by 6,4 percent which translates to $14 billion.
The strategies include the confirmation of the continuous use of the multi-currency system, the commitment by the Government to repay the Zimdollar accounts that were affected by the de-monetisation of the Zimdollar through Treasury Bills and the $100 million injection into the proposed new interbank market so as to revive the interbank activities by the end of January.
The minister also proposed to recapitalize the Reserve Bank of Zimbabwe by 31 March 2014 among other strategies.
Below are some the proposed strategies and how they will affect the growth of the economy.
• $100 million dollars to be injected into the interbank market The minster in his 2014 budget statement said that through the support of Afreximbank, by January 2014, $100 million will be injected into a new interbank market so as to revive a vibrant interbank system. This will facilitate in the creation of money and improve the liquidity condition
• Government to recapitalise the Reserve Bank by 31 March 2014 The minister stated that Government will pay for the RBZ debt by issuing Treasury Bills worth $1.35 billion by 31 March 2014 so as to restore the banks function of the lender of last resort.
• Government to pay Zimdollar account holders Government has made plans to repay Zim dollar account holders who lost their money in banks when the country switched over to the multicurrency system following the hyperinflationary era in 2009.
Minister Chinamasa said $20 million was required to carry out the initiative which would be done through the issuance of Treasury Bills with a Clear 1 capital status to the respective financial institutions for them to further credit back accounts of their clients in their books.
The minister also emphasised that if these confidence building strategies are implemented, the economy by the end of 2014 will grow by 6,4 percent which translates to $14 billion.
Source - bh24
