Govt intervenes on liquidity crisis
By Roadwin Chirara, Business Writer
Thursday, 26 January 2012 10:52
HARARE – Finance Minister Tendai Biti says that government is withdrawing
$110 million from the Zimbabwe General SDR Allocation from the International
Monetary Fund to ease the current liquidity crisis inmarket.
Of the amount,only $20 million will be availed to the Reserve Bank of
Zimbabwe (RBZ) to enable it to carry out its function as lender of last
resort with the balance being allocated as agricultural support, offering
lines of credit to industry and infrastructure support.
He said festive season expenditure pressures, high volumes of high
transactions compounded by civil service salary payments had caused the
challenges.
“It will be necessary that given the high volumes and high value of Budget
transactions that Government plays its part with regards to supporting
orderly transactions within the financial system,” Biti said.
He warned banks from dragging their feet in remitting payments owed to
treasury collected on behalf of the Zimbabwe Revenue Authority (Zimra).
“Zimra has already given each of the concerned banks the necessary initial
written warnings, and had demanded immediate remittance of all overdue
revenue pay-overs to the Exchequer, as well as written guarantees of timely
remittances,” the minister said.
He announced that high value transactions shall be staggered to allow banks
sufficient time to plan and introduce a notice period for high value
withdrawals from banks.
“Notice periods will be related to the value of the transaction, up to a
maximum of seven days,” he said.
He said his ministry would however offer financial instruments in exchange
for $83 million owed to banks in statutory reserves by the RBZ, which he
said was also contributing to challenges in the sector.
“To facilitate transaction in the money market, Treasury is introducing
Discounted and Tradable Paper against Reserve Bank statutory reserve
liabilities to banks willing to participate,” he said.
“Introduction of this instrument will overcome some of the security
challenges banks have been facing with regards to accessing the $7 million
Lender of Last Resort funds at the Reserve Bank,” he added.
He said the country had recorded a budget surplus of $30 million for 2011
attributed to increased revenue inflow that surpassed projected figures of
$2,7 billion for the period.
“The preliminary annual statements for financial performance for the year
ended 31 December 2011 indicates total revenue at $2,921 million and the
total expenditure at $2,89 million, resulting in an overall 2011 Budget
surplus of
$30,4 million,” Biti said.
“This outturn allowed for Government to post a small positive opening
balance which became available for supporting Budget expenditures in January
2012, mainly salaries and pensions payments, at a time when revenue inflows
are seasonally low,” he said.
Zimbabwe’s SDR account with the IMF stands at $212 million after drawing
down $50 million in December 2009 and a further $100 million in February
2010 in support of various infrastructure projects.