RBZ in surprise rate cut, issues warning to exporters

RBZ chief John Mangudya (REUTERS/Philimon Bulawayo)

The RBZ’s monetary policy committee, which sat on Friday, 15 November 2019 resolved to cut the Bank’s policy rate from 70% to 35% with effect from November 20, 2019, according to notes released by the central bank on Monday.

The Bank cites a ‘positive inflation outlook’ despite a spike in the October inflation rate. Last week, Zimstat announced that prices rose by 38.75% in October, from 17.7% the previous month. The Bank says it seeks to support the productive sectors of the economy.

The MPC also resolved that exporters who do not repatriate proceeds within 90 days will have their forex liquidated at the interbank exchange rate.

“The Committee resolved that all exporters that do not repatriate export proceeds within the statutory Exchange Control approved limits, shall forfeit their retention of export proceeds through the liquidation of such funds upon receipt onto the interbank market at the prevailing exchange rates,” reads the statement.

In a bid to improve the operations of the interbank forex market, the MPC directed the setting up of a working group made up of RBZ, bank treasurers and members of the MPC “with a view to improving the market’s efficiency”.

A forex market tracker under the Reuters system will be launched this month-end.
RBZ will also introduce quarterly monetary aggregate targets.

The next MPC will be on November 29, 2019.

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