The post Zimbabwe To Dollarise By June appeared first on Provoker Magazine.
]]>Gift Mugano is a leading economist and executive director at Africa Economic Development Strategies. He spoke as Reserve Bank of Zimbabwe governor John Mangudya told the Confederation of Zimbabwe Industries that Zimbabwe would be using its currency as the main medium of exchange by 2027.
The economist strongly believes that the Zim dollar will collapse because of the ever-changing black market rates. The official exchange rate this week was US$1: ZWL$120 and the black market rate was US$1: ZWL$235.
Prices of basic commodities are increasing every day and this has increased the demand for salaries in US dollars. Addressing participants during an Employers Confederation of Zimbabwe symposium in Harare yesterday, Mugano projected that inflation would shoot to 100% by June this year. He also said the official and parallel market rates would shoot further.
Mugano also spoke about how the increased rates would be driven by huge payments in Zim dollars which people would use to buy foreign currency on the black market. He spoke about how Chinese construction companies –though paid in Zim dollars- would not send Zim dollars back to China. But they would go to Roadport (black-market) and buy US dollars. He also spoke about Tobacco farmers that will also join the queues on the black market with intention of buying US dollars with the Zim dollars government would have paid them.
Mugano expressed his concern over how the government spends the US dollars available to them. He made mention of the money received from the International Monetary Fund through Special Drawing Rights in August 2021. The money has been allocated to projects he felt were not urgent as the US$144 million allocated to the Masvingo Road Interchange Development Project, also known as the Mbudzi roundabout.
Mugano is right that the Zim dollar is very unstable. And it is causing a lot of panic, especially amongst those that are being paid in local currencies. We see this in how the teachers are on strike because they need more money to stay afloat. More and more people are demanding USD for their goods and services because they have no faith in the Zim dollar. You could go to bed with a thousand US equivalent in local currency and wake up tomorrow with just a dollar.
Although using the US dollar as the official currency in Zimbabwe may seem like a good idea, the after-effects of that decision may not be pleasant. The government does not have the capacity to pay all civil servants in USD as seen by their response to the teacher’s requests. Paying civil servants in USD would mean that the government would need to collect more taxes and this will further affect the prices of basic commodities in US dollars.
Perhaps a better approach can be found in Mugano’s expressed concerns. If the government held on to the available US dollars and used them to boost the economy instead of spending projects that do not need immediate attention it could prevent the further erosion of the Zim dollar.
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]]>The post New Monetary Policy: Tell Tale Signs That The Zimbabwean Economy Is In Shambles? (breaking down Monetary Policy 2022) appeared first on Provoker Magazine.
]]>The current state of the Zimbabwean economy is no secret. From an almost inexplicable 1:1 bond note to USD exchange rate to 200:1 +, this is just one of the tell tale signs of an unstable economy. A couple of moves have been made by the government and looking back, its now adding up.
Now you are probably thinking of all those times Zimbabwe’s economy analysts and other reputable sources stated that Zimbabwean was headed towards greener pastures. Eddie Cross issued a statement going in depth on how the economy of Zimbabwe was positioned in a way that it was finally set for stability. The International Monetary Fund (IMF) seemed to back up those statements stating that Zimbabwe’s economy was set to grow more than they had previously reported. All this was said just last year.
On the contrary, other reputable media sources (Bloomberg among others) shared detailed articles of the Zimbabwean economy stating that it was on the verge of collapsing.
So what’s the real deal?
Well, lets take a look on the ground.
The government has announced various measures from the time the statements on the economy being headed in the right direction were made to date. Now, looking carefully at how far we have come, the economy seems further from the “stability” that has been spoken about.
Here are some of the events that have taken place thus far that we will soon dissect to get a clear position on where we are as a country.
Other policy changes were stated in the 2022 Monetary Policy.
Complete 2022 Monetary Policy – DOWNLOAD HERE
The aforementioned are just but a few measures taken by the government between 2021 and 2022. However, why did retractions or alterations have to be made on previously established policies? While changes are allowed, in our case this could be the tell tale sign of a plummeting economy.
Why?
For starters, before the announcement on duties on car import being payable in Zim dollars consider the prevailing situation. ZIMRA was experiences a huge decline in revenue coming in from vehicle imports due to high duty fees. So…no/not as much money as before. A change had to be made, right? If at least half the duty fees is payable in Zim dollar that seems incentive enough for more car imports to take place and more (seemingly much needed) money flows in.
How about the $50 withdrawal at bank rate which has now been reserved for pensioners, senior citizens and vulnerable members of society? Is it possible that in addition to the government trying to limit the people profiting from the arrangement, there also just could be less money available to continue providing the $50 withdrawal limit to the public? Could that be the same reasoning that might have lead to the further limits on mobile money transactions?
The Zim dollar continues to deplete against the USD. However, reports from local based media continue to point to a growing Zimbabwean economy so we might not get to the point where our currency is exhibited in British museums again, right?
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]]>The post RBZ Implements New Measures To Ensure You Can’t Transact As Much Cash As You Might Need appeared first on Provoker Magazine.
]]>New RBZ Measure
RBZ Governor Dr John Mangudya in the latest Monetary Policy Statement announced an increase in transaction limits on mobile banking.
The increases are as follows:
In addition to transaction limits, the RBZ also announced cash withdrawal limits for the banking public which is from ZW$2000 to ZW$5000 per week.
We get why this might be done…but
From past similar decisions, we can deduce that transaction limits are put in place to combat the current black market money activities which have a detrimental effect on the economy when left ungoverned. However, the measures can prove to be a disadvantage for the ordinary person who is paid electronically and might no longer be able to buy essential all at once.
The limits on mobile money proved to be a challenge in the case of the Zimbabwean hero who jumped into a fire to save strangers. The public was moved to cover the hospital bills, however, many weren’t able to continue contributing as the recipients ecocash had reached its weekly limit.
What do you think could be done about this money situation?
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]]>The post Good news for Small to Medium Enterprises as RBZ approves $500 million loan facility appeared first on Provoker Magazine.
]]>Speaking in this regard yesterday, Central Bank Governor, John Mangudya, affirmed that this move would aid economic growth. He added that the bank policy rate at 40% and the interest rate on the Medium Term Accommodation Facility (MBA) at 30% per annum will be maintained.
In addition to the above, Mangudya gave the following statement:
“(The RBZ) approved a facility of ZW$500 million for term finance for micro, small and medium enterprises which the MSMEs will access from banks and micro-finance institutions at 30% per annum for purposes of enhancing production and productivity across all the sectors of the economy; and reaffirmed its position to support bureaux de change with foreign exchange requirements to support MSMEs which need foreign currency for their various productive requirements,”
The Governor reiterated the stand point of the Monetary Policy Committee (MPC) brought up at a meeting held last week. They were pleased with the reduction of the inflation rate from 240, 1% in March 2021 to 194% in April 2021. As a result the MPC expressed their commitment to working to sustain this dis-inflationary path.
This loan facility will be accessed through various financial institutions.
What are your thoughts?
Let us know in the comment section below.
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]]>The post Mthuli Ncube addresses increase in bank withdrawal limit appeared first on Provoker Magazine.
]]>The then established bank withdrawal limiting was placed at $2000. This limit was therefore unsatisfactory to a number of citizens who wanted the weekly limit to be reviewed. Unfortunately this was declined.
In senate on Thursday, Mthuli Ncube, Finance Minster, shared the following sentiments:
“The issue about regulating access to cash was triggered by the abuse that we had seen taking place from the use of the mobile banking platform in terms of electronic money.
We realize that it is necessary to restrict the cash withdrawals, the amounts that can be used at any point in time and be transferred at any point in time.
This is necessary for us to keep those restrictions in place as a general policy. If we loosen up on that, it will cause a lot of difficulties and basically, we will go back to where we were before, where individuals will access larger amounts of cash and then want to trade in the parallel market and just make our currency more unstable”
This decision is said to have been made as a way for government to keep the country’s currency stable.
Mthuli Ncube pointed out that the currency is currently trading at about $84 to 1US$. Some compare this to the $1 to US$1 rate that once was, not mentioning the drastic fluctuations in between, and point out that the currency was never stable to begin with. This point appears to highlight that the governments efforts to stabilize the currency seem futile.
Nonetheless, RBZ Governor, John Mangudya, shared his sentiments on the issue of not increasing bank withdrawal limits. He said that the country’s efforts in stabilizing financial system require team effort by all Zimbabweans and a willingness to comply with given mandates.
What about authorized dealers?
He said the following:
“The Bank’s Exchange Control Inspectorate and the Financial Intelligence Unit (FIU) have enhanced their monitoring and surveillance on the utilisation of foreign exchange in the market to foster market discipline.
Banks and mobile banking institutions are obliged to ensure that the Know Your Customer (KYC) and Customer Due Diligence (CDD) principles are complied with at all times.
In essence, FIU will continue to ensure that authorized dealers or banks and foreign exchange auction system participants comply with auction rules and regulations to stop the abuse of such financial systems.
What are your thoughts on this matter?
Let us know in the comment section below
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]]>The post Ambassador Prophet Uebert Angel hits the ground running appeared first on Provoker Magazine.
]]>Writing on his Facebook the clergyman implored Zimbabweans in the diaspora to invest in Zimbabwe.
You can read his full statement below;
At the STATEHOUSE with Finance Minister, Mthuli Ncube, Reserve Bank of Zimbabwe Governor, John Mangudya, Businessman & Former Professional Footballer Dexter Blackstock (Nottingham Forest, Leeds , QPR etc) and some of the investors after meeting His Excellency, President Mnangagwa. Had four meetings after that and managed to expedite the process under this second republic which carries a mantra ZIMBABWE IS OPEN FOR BUSINESS. The investors were very happy about the experience and the fruitful meetings. More arriving … we are hitting the ground running and if you are a Zimbabwean in the diaspora get in touch @ambassadoruebertangel & invest in your country- your country has enough of what the world needs!
Is the Ambassador doing a good job?
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]]>The post Mthuli and Mangudya Must Resign says MDC Alliance appeared first on Provoker Magazine.
]]>The exchange rate is collapsing every day, the price of the US dollar continues to firm against the fictitious RTGS dollar.
It is fictitious both by definition and by reality; sadly ED Mnangagwa is creating jokes around it.
He flanks himself with his chief economic aides – John Mangudya and Mthuli Ncube to make terrible economic decisions which worsen the suffering of the citizen.
The MDC finds this unacceptable.
We find it unacceptable for Mnangagwa to insult a currency which he imposed on the people and legislated through the back door by way of an unconstitutional statutory instrument.
He is not only responsible for its creation but the fundamentals around it both the objective circumstances (Trade position or the relationship between exports and imports) and the subjective (The social contract or its absence thereof).
There are unending spikes of prices of basic commodities.
The fuel crisis is worsening.
We made the point that the monetary policy should have removed the role of RBZ in allocating funds for fuel.
The fuel industry has the capacity to import on its own and shortages would not be an issue.
This is also true with any other quasi-fiscal activity pronounced together with the introduction of the so-called RTGS dollar.
Mangudya and Mthuli must resign.
The country requires genuine structural reforms. Sadly and strangely, the man who pretends to be doing this work is celebrating turning the nation into beggars.
MDC: Defining a New Course for Zimbabwe
Jacob Mafume
MDC National Spokesperson
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]]>The post DOWNLOAD: Monetary Policy Statement Issued on 1 October 2018 by Dr John Mangudya (PDF) appeared first on Provoker Magazine.
]]>You can download the PDF below:
DOWNLOAD 2018 Monetary Policy Statement
The post DOWNLOAD: Monetary Policy Statement Issued on 1 October 2018 by Dr John Mangudya (PDF) appeared first on Provoker Magazine.
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