Make fresh interbank interventions: Industry

CAPTAINS of industry have called on authorities to make fresh interventions in the inter-bank market to ensure access to foreign currency for importation of critical raw materials for the manufacturing industry.

This comes amid reports that the willing buyer willing seller system on the interbank is failing to yield rewards, as most exporters are holding onto their forex.

Holders of the foreign currency are reportedly waiting for the US dollar to bond notes exchange on the interbank rate to rise to about 1:4 from the current 1:3, 1163 Confederation of Zimbabwe Industries (CZI) president Sifelani Jabangwe told The Herald Business that there was need to investigate what is stopping sellers to come on board apart from pricing issues.

"We are not getting what we require in terms of foreign currency trading on the interbank market, there is need to investigate what is happening on the interbank market; whether it is pricing alone that is stopping sellers from coming on to the market," he said.

"As an industry, we are in full support of the system, but it needs additional fine-tuning to make sure that it is fully operational and industry gets adequate foreign currency requirements," said Mr Jabangwe.

Zimbabwe Chamber of Commerce (ZNCC) vice president for Mashonaland Archie Dongo told local media that there was need to continue reviewing how the interbank market operates to make sure that the country realises optimum success from its existence.

". . . yes an interbank market has been set up, it has got a managed float so its progress is in the right direction we will not arrive in a day; we will not arrive with one policy.

"If the interbank market is not working; if the buyers are willing and if the sellers are not there then we have to keep tweaking the policy until we get to the right policy and make adjustments as we go because evolutions do not work in economics, you keep improving until you get to the optimum success," he said.

Meanwhile, listed pipe-manufacturing concern Proplastics said while they hold bank accounts with several local banks, whom they have instructed to place bids, the firm was failing to access its monthly requirement of US$500 000.

Proplastics chief executive officer Kuda Chigiya said, "We have witnessed a problem on distortions on what is perceived to be the official rate and what is known to be the black market rate. That distortion is actually what is causing the unavailability of foreign currency on the bidding platform.

"It is our wish that it is liberalised that the willing buyer willing seller can actually bring his foreign currency and the willing buyer brings his offer so that there is an acceptance on the two equilibriums.

"Since the inception of the interbank we have been bidding. We bank with about 4-5 local banks and I think each and every bank has our bid sitting with them and we have only been successful on one bank for about $75 000 and all the other bids were not successful.

"Our monthly requirement of foreign currency is us$500 000, however, due to the unavailability of foreign currency we have set up special arrangements to keep our business afloat," said Mr Chigiya

However, Finance and Economic Development Minister Professor Mthuli Ncube is on record saying both industrialists and individuals do not have significant sums of RTGS dollars to spark a meaningful demand for foreign currency to push the rate further.