Currency reforms not an overnight process: Industry

Webster Rusere

HARARE – The Bankers Association of Zimbabwe (BAZ) says the delicate issue of currency reforms requires more consultations and has highlighted the urgent need to address unsustainable trade imbalance as well as budget deficit if the country is to achieve the broader macro-economic aspirations.

BAZ said while it supports robust debate on currency reforms, the long term solution to the current economic challenges hinges on the ability to tackle the current budget deficit and unsustainable trade imbalances.

The association’ s president Mr Webster Rusere said the country requires to get the fundamentals correct by addressing the budget deficit, improving market confidence and boosting output before worrying about the currency direction.

“In our view we need to get fundamentals right, currency reforms are at the end of the equation. Let us address trade imbalances and budget deficit. We, however, need to debate about the currency reforms but mindful that it is a very delicate subject,” he said.

According to BAZ the new cabinet has instilled confidence and highlighted the need for reengagement with the international community in order to improve the country’s ratings and attract low cost funding.

Meanwhile, the Zimbabwe National Chamber of Commerce (ZNCC) and other captains of industry have also called for more debate on the currency reform and also stressed the need to guarantee the independence of the Reserve Bank of Zimbabwe (RBZ).

“The currency issue is not an overnight issue thing. Solutions is in confidence building and RBZ should have independence,” said the ZNCC CEO Mr Christopher Mugaga.

According to the ZNCC the overvalued exchange rate on the domestic market and the growth in rtg balances which are not matched with available US dollars remains some of the threats to economic growth.

The comments by BAZ and ZNCC comes at a time Finance Minister Professor Mthuli Ncube has embarked on consultative roadshows meant to get inputs from different segments of the domestic economy on strategies to achieve inclusive and sustainable economic growth.