|
Back to Index
2012
Mid-Term Monetary Policy Statement
Gideon Gono, Governor of the Reserve Bank of Zimbabwe
July 31, 2012
Download
the full document
- Acrobat
PDF version (474KB)
If you do not have the free Acrobat reader
on your computer, download it from the Adobe website by clicking
here.
1. Introduction
and background
1.1 This Monetary
Policy Statement issued in terms of Section 46 of the Reserve
Bank Act (Chapter 22:15), is presented against the background
of elevated global turbulences occasioned by the Eurodebt crisis
which continue to buffet developing and emerging market economies.
The slow-down in the global economy has in turn depressed international
commodity prices, thereby amplifying external sector vulnerabilities
in Zimbabwe.
1.2 These adverse
global developments have combined with, tight domestic liquidity
conditions, limited access to offshore lines of credit, frequent
power outages and a huge debt overhang to take steam off the recovery
momentum gained since the adoption of multiple currencies in 2009.
1.3 The country
is also saddled with an unsustainable external debt burden which
is currently estimated at over US$10 billion. This huge debt overhang
continues to undermine the economy's ability to attract offshore
credit at competitive rates. This adverse development poses serious
developmental challenges as credit lines are critical in supporting
industrial recapitalization, given attendant liquidity shortages
in the domestic economy.
1.4 In addition,
the promulgation of economic empowerment regulations have dented
confidence in the banking sector whose intermediary role remains
integral in the attainment of fast paced economic growth. Well-functioning
financial markets are an essential link in the transmission of monetary
policy to the economy and a critical foundation for sustained economic
growth and stability.
1.5 Notwithstanding
significant strides made in stabilizing the economy, the multiple
currency era has been epitomized by transitory deposits in the banking
sector, short term loans, market illiquidity and lack of money market
instruments. Additionally, the increase in cash based transactions,
financial disintermediation, settlement risk and asset quality vulnerability,
remain worrisome.
1.6 Indiscipline
in the banking sector has once again reared its ugly head. This
is evidenced by increased abuse of depositors' funds as well
as the endemic over-stepping of operational mandates by money lending
institutions. Indeed history is repeating itself as the current
challenges faced by the banking sector are reminiscent of the episodes
experienced over the period 2003-2004.
Download
full document
Please credit www.kubatana.net if you make use of material from this website.
This work is licensed under a Creative Commons License unless stated otherwise.
TOP
|
