Monetary policy review this week

via Monetary policy review this week – NewsDay Zimbabwe February 10, 2015

RESERVE Bank of Zimbabwe governor John Mangudya will this week present the Monetary Policy Statement at a time his hands are tied with little room to manoeuvre as the economy continues to take a nosedive.

Local economist Pamela Makanjera said the market should not expect any significant changes from Mangudya’s Monetary Policy Statement to be presented either today or tomorrow given the poor state of the economy.

“The Reserve Bank of Zimbabwe is an adviser to government and must suggest or let government know the seriousness of the need to revive industry as there is no money in the economy,” Makanjera said.

She said there was no way money supply could increase as the country was importing most of its products.

Mangudya would be presenting the Monetary Policy Review under difficult conditions as the central bank is yet to assume its roles as lender of last resort, manager of exchange control and regulator of financial institutions.

The governor is presenting the Monetary Policy Statement under the same difficult conditions that prevailed in August when he presented his first Monetary Policy.

Under normal circumstances the, central bank is supposed to buy or sell short-term government bonds and boost the money supply chain.
In his maiden monetary policy statement, Mangudya said little about monetary policy.

His major task this time would be to convince the market to accept the recently introduced bond coins which have faced fierce resistance especially from the informal sector and members of the public.