Published by the government of Zimbabwe
Victoria Ruzvidzo

Harare — RESERVE Bank of Zimbabwe Governor Dr Gideon Gono yesterday hit out at suggestions that the monetary policy statement announced early this month had been nullified, stressing that it remained the legal document directing monetary policy in this country.

In apparent reference to statements made by...
Deputy Prime Minister Professor Arthur Mutambara who on Thursday advised the business community to disregard the Monetary Policy Statement and the 2009 National Budget, Dr Gono said to the contrary, his statement and all its provisions remained authentic.

Prof Mutambara told business during a chief executive officers' roundtable in Harare that they should not base any planning on the two policy documents because "fundamental reviews" were being done.

"The Monetary Policy Statement I issued remains the legitimate and only Monetary Policy Statement that this economy and its stakeholders must obey and work with.

"As Governor, I have not received any formal indications from the the Presidium, Premiership and the ministerial committees, industry or from anyone else regarding improvements that need to be made.

"Ordinarily, where there is room for policy enhancement, such enhancements must be done in an orderly and professional manner, with the singular objective of being constructive in the public interest, as opposed to deliberately engaging in destructive pronouncement," he told journalists, bankers and other business executives at a Press briefing in Harare yesterday.

The central bank's operations were informed and guided by the Reserve Bank of Zimbabwe Act.

He said for much of yesterday, his office had been inundated with calls from farmers, exporters, gold producers, local and international organisations and others who sought clarification on the direction the economy was now taking. Many had interpreted Prof Mutambara's statements to mean that all measures announced in the Monetary Policy Statement had been reversed.

He said regional and international financiers who had offered at least US$500 million in lines of credit on the back of the recent policy liberalisation, had registered concern on the "conflicting" signals coming from Government.

"This morning, I received calls from corresponding banks, some of whom we are working with to put together some lines of credit. It was then that I felt the matter was too serious to be left to die a natural death," said Dr Gono.

Policy consistency is critical in restoring business confidence. This issue had also been raised by business during deliberations at the CEOs' roundtable.

Dr Gono said certainty and predictability of announced policies were a key component of the new roadmap. Furthermore, minimal policy shifts and reversals, consistency between policy announcements

and action on the ground, and respect for private property, were instrumental as Zimbabwe charted a new path to rejuvenate the economy.

Dr Gono said contrary to some beliefs, as intimated on Thursday, the central bank consulted widely in drafting its monetary policy statements.

"It's not like the Governor just wakes up in the morning to just dictate policy. We always invite input and, particularly in the recent statement, we borrowed from input from the IMF (International Monetary Fund), the Sadc region and other stakeholders, and the bank remains open to suggestions from any quarter in terms of improvements but these should be made through the right channels," he said.

The next Monetary Policy Statement is scheduled for July. The Reserve Bank Act stipulates that the statement be announced bi-annually. Only in some special circumstances are quarterly reviews permissible.

Initially, Dr Gono had been making quarterly reviews but he had since reverted to the bi-annual pronouncements.

Yesterday, Dr Gono applauded the formation of the inclusive Government.

"We are extremely excited as the central bank by developments on the political front. We have always called for political unity and now that this is in place, we are very excited and the future of this country looks bright, very, very bright."

In previous monetary policy statements, the central bank chief always stated that political settlement was a prerequisite for sustainable economic recovery and growth.

The ushering in of the inclusive Government had now made it possible for the different arms of the Government and public institutions to now go back to serious work hence freeing the Reserve Bank to return to its core functions.

He reiterated that RBZ would now concentrate on exchange control, interest rate management, among other functions that remained a preserve of the central bank.