eBusiness Weekly
Oliver Kazunga
Business Writer
THE Confederation of Zimbabwe Industries (CZI) says it has held a meeting with the Reserve Bank of Zimbabwe (RBZ) and was given assurances that the monetary authorities had no intention to “raid” foreign currency accounts of business in the country.
Last week, CZI indicated in its urgent engagement paper on the deteriorating currency, warned that the economy was facing collapse if the Government insisted on imposing the rapidly weakening local currency on the market.
CZI said the Zimbabwe dollar was on the “brink of rejection in the face of exchange instability and increasing inflation”.
It also warned of a possible bank run amid fears of a raid on foreign currency balances.
CZI also called on the Reserve Bank of Zimbabwe (RBZ) to suspend the foreign currency auction system after the Zimbabwe dollar fell to $350 against the greenback against the official rate of $155.
In a statement yesterday, CZI president Mr Kurai Matsheza said their statement headlined “CZI urgent engagement paper on the deteriorating currency situation” circulated unintended but was meant for dialogue with the authorities.
“We have subsequently met with the RBZ Governor, Dr John Mangudya and would like to highlight the outcome of our meeting.
“The CZI wishes to relay the following specific matters discussed with the Governor and the assurances given on the same: The de-dollarisation is going to be a process and no rushed return to an exclusively Zimbabwe dollar or US dollar environment is planned, there is no intention to ‘raid’ foreign currency balances, and the auction backlog is a priority for the RBZ and concerted efforts are underway to clear this backlog.”
He said the other matters raised in the said CZI document shall form the basis of further consultations between the industrial body and the authorities on a continuous basis as has been the normal and usual custom.
“As CZI, we remain committed to engage with the government and collaborate in the best interests of the economy, our members and business,” said Mr Matsheza.
In their engagement paper last Friday, CZI also suggested that foreign currency retentions be financed through the budget and that banking institutions encourage exporters to freely set reserve prices and sell their foreign currency on the auction system.
It also called for the RBZ to suspend quasi-fiscal activities which increase money supply growth and create arbitrage opportunities or market distortions.
CZI also suggested that the Apex Bank should do away with the foreign currency priority list and liberalise the market, while also keeping tight control on money supply.
