Business / Economy
Chinamasa to inject $100m into RBZ
20 Dec 2013 at 05:54hrs | Views
GOVERNMENT will restore the banker of last resort function of the Reserve Bank of Zimbabwe with effect from April 2014 by injecting $100 million into the institution, Finance Minister Patrick Chinamasa said yesterday.
Presenting the 2014 National Budget in Parliament, Minister Chinamasa said the $100 million interbank programme would be supported by the African Export-Import Bank.
"This inter-bank market is a necessary first step or first resort to build confidence within and among the local financial institutions, that way overcoming the liquidity problem as banks trade with each other," said Minister Chinamasa.
"Once we have successfully established an inter-bank market and capitalised the Reserve Bank by 31 March 2014, the central bank would resume the role of banker to Government."
Before the introduction of a multi-currency system in 2009, the local banking system had a vibrant interbank market anchored on the RBZ as lender of last resort and liquidity support provider.
The current situation is one where each bank is left to fend for itself as there is no formal interbank market.
During the tenure of the inclusive Government from 2009 to 2013, only $7 million was provided for the restoration of the banker of last resort function of the RBZ.
Minister Chinamasa said Government would try to raise between $150 million and $200 million to recapitalise the central bank by March 31, 2014.
Presenting the 2014 National Budget in Parliament, Minister Chinamasa said the $100 million interbank programme would be supported by the African Export-Import Bank.
"This inter-bank market is a necessary first step or first resort to build confidence within and among the local financial institutions, that way overcoming the liquidity problem as banks trade with each other," said Minister Chinamasa.
"Once we have successfully established an inter-bank market and capitalised the Reserve Bank by 31 March 2014, the central bank would resume the role of banker to Government."
The current situation is one where each bank is left to fend for itself as there is no formal interbank market.
During the tenure of the inclusive Government from 2009 to 2013, only $7 million was provided for the restoration of the banker of last resort function of the RBZ.
Minister Chinamasa said Government would try to raise between $150 million and $200 million to recapitalise the central bank by March 31, 2014.
Source - herald
