OK Zimbabwe backs interest rates reductions, liberalised WBWS system

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By Alois Vinga

TOP retailer, OK Zimbabwe has hailed the recent move by the Reserve Bank of Zimbabwe (RBZ) to reduce interest rates and liberalisation of the foreign currency management system hinting that such positives will stimulate business.

The remarks come shortly after the central bank’s 2023 Monetary Policy Statement (MPS) reduced interest rates from a high of 200% to 150% with productivity inclined loans by companies being allowed to attract between 75% to 100% interest.

While the high interest rates were enforced as a disciplinary measure to ease speculative borrowing which in turn was used as a source to fund trades on the parallel foreign exchange market, several companies had for long cried foul over the measure’s negative impact on productive borrowing.

Presenting a trading update for the third quarter period ended December 31 2022, OK Zimbabwe company secretary, Margaret Munyuru commended authorities for the bold stance.

“We welcome the reduction in interest rates pronounced by monetary authorities, and the envisaged further liberalisation of the Willing Buyer Willing Seller foreign currency management system.

“The monthly inflation rates showed signs of slowing down towards the end of the quarter as measures instituted by fiscal and monetary authorities began to bear fruit,” she said.

She said despite liquidity constraints which were witnessed in the last three months of 2022 resulting in dampened consumer demand, the country’ s exchange rates relatively stabilised during the third quarter pursuant to monetary policy interventions.

“Resultantly, forex collections improved in direct comparison to the prior quarter.

“However, Excessive power outages severely affected business operations and resulted in heavy reliance on generators and other alternative power sources, thereby compromising the ease of doing business and increasing operational costs,” she said.

The group continues investing in volume growth strategies embedded in various strategic projects which have a high potential to contribute to growth and improve the overall business performance in the last quarter of F23 and the coming financial years.

In terms of financial performance, the company’ s revenue grew by 18,3% for the quarter and 28,4% for the nine months in inflation adjusted terms compared to growth of 320,4% and 316% for the quarter and nine months to December 2022 respectively in historical cost terms.