Finance and Economic Development minister Patrick Chinamasa has said the banking sector remains sound and stable despite cash shortages, emanating mainly from fiscal pressures.
Source: Banking sector sound, stable: Chinamasa – NewsDay Zimbabwe September 12, 2016
BY TARISAI MANDIZHA
The country has been hard hit by cash shortages since the beginning of the year, which resulted in withdrawal limits to as low as $50 and $100 per day.
In his mid-term fiscal policy review statement on Thursday, Chinamasa said the situation had a negative bearing on financial intermediation, a critical factor for the performance of the real sector of the economy.
“It is important that we all appreciate the interlinkages, under a multi-currency system, between liquidity and external inflows into the banking system through production for export, diaspora remittances, foreign direct and portfolio investments, as well as foreign lines of credit,” he said.
“In light of the importance of exports in sustaining the multi-currency system, government has instituted a number of export incentives, including the bond notes scheme supported by the counter-cyclical facility from the African Export-Import Bank.
“This is being complemented by measures on ensuring efficient utilisation of foreign currency. Furthermore, the Diaspora policy is now in place and stands to promote inflows of Diaspora remittances into the country, and, hence, improve the liquidity situation.”
In the period under review, asset quality in the banking sector continued to improve as reflected by an improvement in the ratio of non-performing loans to total loans, from a peak of 20,4% as at September 30, 2014, to 10% as at June 30, 2016.
“The improvement in asset quality is largely attributed to enhanced credit risk management strategies, as well as the takeover of qualifying non-performing loans by Zimbabwe Asset Management Company (Zamco),” Chinamasa said.
“As at June 30, 2016, banking institutions had disposed qualifying non-performing loans amounting to $528,4 million to Zamco.”
In the period under review, total banking sector deposits increased by 5,5% from $5,6 billion, as at June 30, 2015, to $5,9bn, as at June 30, 2016, spurred by tobacco selling season-related inflows.
“However, the banking sector was exposed to cash shortages, largely as a result of macro-economic challenges facing the country, including lack of fiscal space and the current account deficit,” Chinamasa said.
He, however, said all operating banking institutions were in compliance with the prescribed minimum capital requirements as at June 30, 2016 and the central bank was monitoring banking institutions’ progress towards compliance with the 2020 minimum capital requirements.
COMMENTS
Banking is sound, even though there is no money in the banks. Zanu PF economics.
Do none of these fools ever stand back and see the stupidity of their utterances?
“However, the banking sector was exposed to cash shortages, largely as a result of macro-economic challenges facing the country, including lack of fiscal space and the current account deficit,” Chinamasa said.
Of course, “the current account deficit” is due to those nasty people in the EU and West. No never mind that all that cash was stolen by Mugabe and ZANU-PF friends… it just magically disappeared … just like all those businesses and jobs and diamonds … just like those 20,000 victims of the 5th Brigade .
Which reminds me, will all those who served in the 5th Brigade please raise your hand. Surely, you guys take pride in your accomplishment, and would like to have a reunion… and maybe a ribbon for your campaign to show pride in your service to your master.
How can one’s car be sound when it has 4 flat tyre’s, no petrol in the tank and the battery is dead?
This is the real state of affairs – a basket case of a whole bag of rotten apples! Stay hungry.
Stop lying we are all quite sick of it, you have stolen our money. Our international cards cannot be used outside zim why it is in usd. It does not take a degree to know whats happening. That why people are worried, they have reason to be.