THE Confederation of Zimbabwe Industries (CZI) have had most of their policy proposals on the monetary policy review accepted by the Reserve Bank of Zimbabwe (RBZ) governor Gideon Gono. <
THE Confederation of Zimbabwe Industries (CZI) have had most of their policy proposals on the monetary policy review accepted by the Reserve Bank of Zimbabwe (RBZ) governor Gideon Gono.
In December the RBZ agreed to some of the industrialist body’s proposals for the introduction of the foreign currency auction system.
This time most of the CZI’s suggestions have been taken on board.
The CZI sent its proposals to the central bank on March 16.
Other institutional organisations that had some of their policy recommendations taken on board include bankers and the hospitality industry.
In their 15-page proposals the CZI had proposed that there be among other things amendments to the Free on Board export (FOB) provision and the scrapping of the US$1:$824 exchange rate.
The CZI had also made proposals on how tobacco production should be handled and how the Tripartite Negotiating Forum should be handled.
Antony Mandiwanza is the president of the CZI.
The grouping suggested that amendments be made on how exporters access their Foreign Currency Accounts, which again were taken on board.
However Gono would not accept the industrialists’ proposals that the $824 exchange rate be removed, and as an option companies wishing to exercise this option would forego any further access to the productive sector support facility.
The productive sector support, which attracts only 30% interest but was set to end in June, has been extended for a year.
Gono and CZI also agreed that with the initial success of the monetary policy in defusing inflationary pressures the predicted 200% anticipated inflation year-end looks more certain.
With inflation going down the two parties agree that it was possible to contain inflation, and it is necessary for interest rates to be aligned in line with inflationary trends.
When Mandiwanza proposed the scrapping of the official interest rate after the announcement of the review, Gono said that it was too early to remove.
“Rome was not built in a day,” Gono said.”It is only fair that we start by having those that externalised their money bring it back home. I am not talking about you personally (Mandiwanza). No.
“Ladies and gentleman let it be known that the proposal actually came from Mr Mandiwanza’s grouping.”
In line with the CZI proposals, Gono announced that in order to recognise logistical bulk shipment constraints so as not to prejudice exporters they could retain some foreign currency in their accounts.
“Exporters for whom shipping delays are inevitable and exporters of approved extensions beyond 120 days will be allowed to retain 30% as opposed to the current 0% in their foreign currency accounts,” Gono said.