Zimbabwean banks, industry wary of phantom stimulus package

Zimbabwean banks and industry are skeptical about the government's plan to pump $18 bln in rescue loans into the struggling economy amid fears that the move could stoke inflationary pressures.

According to submissions from the Bankers Association of Zimbabwe to next year's national budget, Government should provide a stable, predictable and conducive macro-economic environment.

BAZ said that the current interest rate framework and expansionary monetary policy largely negates efforts to stabilise the exchange rate.

Bankers also recommended the elimination of the multiple subsidies which would in turn ease the fiscal burden on government finances.