The central bank’s delay in announcing the monetary policy statement (MPS) has resulted in companies operating cautiously, the Confederation of Zimbabwe Industries (CZI) has said.
Traditionally, the MPS is announced between end of January and first week of February, but hasn’t to date.
“Our major concern is how the currency issue will be addressed. Until that, as industry we will continue to operate cautiously on short-term plans,” said CZI president Sifelani Jabangwe said.
He said the delay has already affected two months of industry potential as industry cannot plan.
Reports are that both fiscal and monetary policies in supporting a liberalised foreign currency market, effectively discarding the 1:1 US dollar bond note/RTGS dollar peg, have arguably been the main reason behind the undue delay in announcing the 2019 monetary policy statement.
Meanwhile Jabangwe said even creditors who provide working capital to companies are holding on to their funding, awaiting the monetary policy statement direction.
“The MPS together with the budget are key documents that shape our operations and planning, therefore, as the delays continue, industry potential is doomed,” he said.
However, economists are of the view that John Mangudya, the Reserve Bank of Zimbabwe governor should increase foreign currency retention thresholds for exporters, liberalise the US dollar exchange rate and introduce an interbank market as Zimbabwe advances towards a new local currency over the next 12 to 18 months.
Eddie Cross, an economist, recently said monetary reforms had now reached a stage where the authorities will float the local currency (RTGS and bond notes) against the US dollar on an interbank market.