via MPS preparations gather steam January 10, 2014 NewsDay
PREPARATIONS for the much-delayed Monetary Policy Statement have gathered steam as business organisations have begun inviting final submissions ahead of the presentation later this month.
Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability.
Former Reserve Bank of Zimbabwe (RBZ) governor Gideon Gono attributed delays in announcing the monetary policy last August to electoral process leading to the July 31 harmonised elections.
The RBZ is scheduled to announce the policy statement at a time when weaker financial institutions are facing solvency problems.
The capitalisation of the apex bank, restoration of its lender of last resort role and the resumption of the interbank bank market is expected to be addressed in the monetary policy statement.
According to a confidential central bank document seen by this paper, as at September 2013, a total of 14 out of 21 operating banking institutions (excluding POSB), were in compliance with the December 2012 minimum capital requirements of $25 million.
In 2012, the central bank announced minimum capital requirements that saw banks being required to have a minimum core capital of $100 million by June this year.
In its weekly market report, AfrAsia Kingdom appealed to the central bank to extend compliance period for the capitalisation exercise.
“It would be prudent for the RBZ to either reduce the capital requirements or to extend the compliance period beyond 2014,” the report said.
“In the Sadc region, Zimbabwe appears to be at an extreme end of the minimum capital requirements as countries like South Africa and Angola have much lower minimum capital requirements.”
The Zimbabwe National Chamber of Commerce yesterday said: “The Chamber therefore wishes to extend this request to you our valuable members and stakeholders to provide us with your contributions which we will incorporate into the final ZNCC monetary policy input.
“In your proposed contributions and inputs, please kindly highlight attendant challenges in your area of focus and attach great prominence to possible ameliorative monetary policy measures which the RBZ can tap into from a policy perspective.”
Other issues expected to be tackled by the central bank include interest rates following a decision by the bank to lift a memorandum of understanding on bank charges and interest, effectively giving banks the autonomy to raise charges.
Already, Finance minister Patrick Chinamasa has acted on errant banks following this move.