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All eyes on new RBZ boss

by Staff reporter
31 Mar 2024 at 16:36hrs | Views
RESERVE Bank of Zimbabwe (RBZ) new governor John Mushayavanhu is facing a tough challenge as he is expected to immediately halt the freefall of the Zimbabwe dollar and stop the economic implosion blamed on the currency chaos.

President Emmerson Mnangagwa last week retired RBZ governor John Mangudya a month earlier to give his successor room to come up with fresh measures to stabilise the economy.

He was initially supposed to begin duties on May 1. Mushayavanhu, a veteran banker, is expected to issue a new monetary policy in the coming days and he might use the occasion to introduce a new structured currency.

Zimbabweans are battling high inflation as the local currency continues to lose value against the greenback.

The Zimbabwe dollar is now trading at US$1 to $32 000 on the much used black market compared to $5 000 in December.

Economic analysts, who spoke to The Standard, said central bank governors had not been given the opportunity to make independent decisions to implement monetary policies to turnaround the economy.

"With institutions like the RBZ, it's not necessarily about the person, an individual, but it's system driven," said economist Gift Mugano.

"One person cannot be a rocket scientist in an institution like that. "Whether John Mangudya was going to stay for another month, it was not going to change anything because of the lack of independence and political interference.

"It's not going to be a miracle for the incoming governor as long as politics is at play."

Former MDC-T shadow Finance minister Tichinani Mavetera concurred with Mugano that political interference was negatively affecting the performance of the central bank

"Based on what has been happening in the country since 1980, I think we are at a crossroads where we need people who are professional, independent and committed to make a change to the general suffering of the Zimbabwe population," Mavetera said.

"We wish that the powers that be, that is Mnangagwa, gives the governor the correct latitude to fix the economy because without that, it's mission impossible for the new governor."

Mavetera said there was need to tackle the currency crisis.

"It is imperative that we have a functional currency," he said said.

"Right now as it is, the currency is being controlled by hearsay.

"We need to ensure the general populace understands what it means on currency issues."

Mugano called for national dialogue to resolve the currency crisis.

"We need a national indaba on currency issues. We need a shared vision," he said.

"We need serious discussion, wide consultations with the people."

The government reintroduced the local currency in 2019 after a decade of dollarisation.

Source - the standard