Commercial Farmers' Union of Zimbabwe

Commercial Farmers' Union of Zimbabwe

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Monetary Policy highlights

Monetary Policy highlights


The Financial Gazette 3/10/2018

Staff Reporter

Reserve Bank of Zimbabwe governor, John Mangudya

MONETARY POLICY HIGHLIGHTS: Presented by RBZ governor John Mangudya

*Zimbabwe will surpass the initial growth projection of 4.5% by December 2018 and register growth of around 5%.

*The Reserve Bank of Zimbabwe expects inflation to remain within the SADC healthy inflation benchmark of not exceeding 7% in December this year.

*With immediate effect, all banks have been directed to effectively operationalise the ring-fencing policy on Nostro foreign currency accounts by separating foreign currency accounts (FCAs) into two categories, namely Nostro FCAs and RTGS FCAs

*The Reserve Bank is finalising discussions with the African Export-Import Bank (Afreximbank) towards a US$500 million Nostro Stabilisation Guarantee Facility (NSGF) to provide Nostro FCA holders with assurance that foreign currency shall be available when required by the account holders.

*The Reserve Bank has finalised putting in place facilities in an amount of US$500 million to cater for importation of strategic requirements that include fuel, electricity, cooking oil, wheat, packaging, etc. The facilities are from Gemcorp US$250 million, Afreximbank US$150 million and Afrigrain US$100 million.

*With immediate effect, all foreign truckers plying the Zimbabwean routes shall pay for their fuel in Zimbabwe in foreign currency. The same shall apply to foreign traders buying goods in Zimbabwe for sale in the neighbouring countries.

*All purchases of gold by Jewellers from Fidelity Printers and Refiners shall be in foreign currency and that Jewellers shall retain 100% of their export proceeds.

*In order to promote transparency in the issuance of Treasury Bills, (TB) with effect from November 1 2018, RBZ shall be inviting tenders on behalf of government, for investors to participate in the auction system of TBs.

*The Reserve Bank has expanded the productive sector facilities to include the establishment of a US$50 million Construction Finance Facility for retooling and working capital requirements for the construction industry in line with the growing economy.


*Domestic debt now standing at US$16,9 billion ($9,5 billion – domestic and US$7,4 billion external debt)

*Government overdraft with RBZ stands at US$2,3 billion, as at end of August 2018, well above the statutory limit of US$762,8 million.

*Government to effectively limit the use of the RBZ overdraft facility and curtail the bank’s advances to government in line with Section 11(1) of the Reserve Bank Act [Chapter 22:15], which states that borrowing from the Reserve Bank shall not exceed 20% of the previous year’s government revenues at any given point.

*Treasury Bill issuances have increased from US$2.1 billion in 2016 to a cumulative US$7.6 billion, by end of August 2018.

*Going forward Treasury will seek to finance Government’s vital socioeconomic development programmes by use of instruments that “crowd in” the private sector, including public private partnerships or Government guarantees to financial institutions.

*Money Transfer Tax has been revised from 5 cents per transaction to 2 cents per dollar transacted, effective today (1 October 2018.)

*Current ZIMRA board’s term has been terminated with immediate effect. Mthuli Ncube has proposed names of new board members which are currently being cleared.

*Going forward, systems of ZIMRA will be upgraded and enhanced in order to improve efficiency in revenue collection, especially at border posts. Mechanisms will be put in place to eradicate any corrupt activities.

*In 2014, Treasury Bills to GDP ratio was at 4.4% and has increased sharply to 36.5% by end of August 2018. ,


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