'Interbank market being manipulated'

'Interbank market being manipulated'
Published: 26 April 2019
CAPTAINS of Industry have implored government to allow free and efficient functioning of money markets amid fears the interbank market is being manipulated.

Confederation of Zimbabwe Industries (CZI) president Sifelani Jabangwe said it was imperative that government ensures that money and foreign exchange markets, as well as labour, function without government interference.

"Any further delays to allow markets to operate without interference, will work against the good of the manufacturing sector and the economy at large," Jabangwe said as he addressed business executives at the International Business Conference at the ZITF on Wednesday.

He added that promotion of industries with higher income and employment levels through incentives will also promote the growth of industry.

Jabangwe called for dialogue within the Tripartite Negotiating Forum so as to reestablish the balance in the economy.

"We need to re-establish the equilibria among sectors similar to what prevailed before August 2018.

"Then with an effective interbank market, allow the country to grow," Jabangwe said.

He noted that the monetary policy statement (MPS) presented by Reserve Bank of Zimbabwe (RBZ) governor John Mangudya lacks clear rules guiding the interbank market operations.

Consequently, Jabangwe said this is affecting the interbank's perceived transparency, hence industry fears it can be subject to manipulation by any of the players.

"There are also concerns that the regulatory hand is determining the foreign currency exchange rate on the interbank platform, hence it's not viewed as a rate determined by willing-buyer willing-seller  trades," he said.

Prior to the floating of the exchange rate in February, the central bank maintained a fixed 1:1 rate between the greenback and the bond notes, with the central bank allocating foreign currency to various sectors of the economy.

The floating of the exchange rate, which was welcomed by the private sector, allows players to acquire foreign currency at a willing buyer willing seller rate.
- dailynews
Tags: Interbank,


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