RBZ approves $2.5 billion support for productive sectors, maintains clip on Ecocash

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By Alois Vinga

THE Reserve Bank of Zimbabwe (RBZ)’s Monetary Policy Committee has approved a US$2.5 billion lending facility to back up the country’s productive sectors but maintained its grip on Ecocash transaction limits as part of measures to buttress current exchange rate stability.

In an update following the MPCs meeting early this month, central bank governor John Mangudya said the fund will be disbursed through formal channels.

“The funds will be accessed by final beneficiaries through normal banking channels under an arrangement that is consistent with the conservative monetary targeting framework being pursued by the RBZ,” he said.

The lending facility is set to revive the country’s industrial sector by unlocking much needed capital to secure raw materials and machinery.

The facility comes after the central bank’s Foreign Exchange Auction has to date availed a total of US$291 million to industry.

Accordingly, banks were encouraged to ensure that repayments by their customers from the existing financing facilities are used to augment the bank’s medium-term financing window.

The MPC also resolved to maintain a status quo on both the policy rate for overnight accommodation at 35% and the medium-term lending rate for the productive-sector lending at 25%.

This decision on interest rates takes into account the current tight liquidity conditions in the market and the need to continue controlling speculative borrowing.

The committee agreed to maintain the limit of $5 000 per transaction for mobile money transactions and adopt a weekly limit of $35 000 which will be reviewed continuously in line with the requirements and convenience of the transacting public.

“All financial transactions shall continue to be closely monitored by the Bank especially leveraging on the successful implementation of interoperability of mobile money platforms with effect from 30 September 2020,” he said.

The central bank governor said this entails that the transacting public can now easily move funds within the banking system and across the four mobile banking platforms, that is, One Money, My-cash, Telecash and Ecocash, through one common national switch.