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All eyes on Mangudya

by Staff reporter
19 Feb 2019 at 17:09hrs | Views
THE governor of the Reserve Bank of Zimbabwe (RBZ) Dr John Mangudya will tomorrow (Wednesday) release the long-awaited Monetary Policy Statement (MPS). And on Friday, Mangudya will meet various stakeholders at a local hotel to further unpack his MPS.

Dubbed the Daily News Breakfast Forum, the breakfast meeting will be held at a local hotel where Finance minister Mthuli Ncube will be the guest of honour.

A spokesperson for the Daily News said the Forum is "a must attend" for decision-makers.

"Business leaders, members of professional associations, representatives of Non-Governmental Organizations, members of industry associations,  government and civic society representatives, policy makers and diplomats are particularly encouraged to attend," said the Daily News spokesperson.

While Mangudya was billed to present the MPS last month, the former CBZ Holdings Limited chief executive officer (CEO) is said to have taken his time to release the statement in order to give his team at the RBZ enough time to tie up the loose ends.

Tomorrow (Wednesday), the market will be eagerly waiting to see what the governor has instore for an expectant nation.

Mangudya is presenting the MPS at a time when economic fundamentals are weak.

Inflation, which denotes the general level of prices, surged to a 10-year record of 56,90 percent last month (January) from 42,09 percent the previous month.

Apart from the underlying inflationary pressures, the Apex Bank is also battling foreign currency shortages, with the competing demands for the resource overwhelming the supply side.

With the formal market struggling to meet the demand for foreign currency, the country has found itself grappling with a thriving parallel market for hard currency, where external currencies are fetching huge premiums.

For the longest time, the bond note - introduced in 2016, along with the Real Time Gross Settlement (RTGS) virtual currency - have significantly lost ground to the American dollar on the unofficial market.

The nation will therefore be waiting with bated breath to see if Mangudya will maintain the exchange rate at the same level or grab the bull by its horns by allowing market forces to price units within his basket of currencies.

Mangudya has previously lamented Zimbabwe's mammoth challenges as stemming from its failure to produce for the export market.

Against that background, he may be forced to review his export incentives to stimulate exports.

Today may also present an opportunity for him to further relax the retention thresholds for exporters to enable them to operate viably.

Source - dailynews