Monetary policy review pleases industry leaders

THE reduction in interest rates and the increase in foreign currency retention thresholds are expected to enhance the capitalisation of local businesses across sectors while driving their ability to export more, industry leaders have said.

Welcoming the pronouncements in the 2023 Monetary Policy Statement issued by the Reserve Bank of Zimbabwe (RBZ) last week, industry experts said they were pleased with the latest measures which they said they had long lobbied for.

In its statement, the Apex Bank said it had reduced its bank policy rate from 200 percent to 150 percent per annum and widened foreign currency retention thresholds for exporters from 60 percent to 75 percent across all sectors while forex retention on domestic sales was reviewed to 85 percent.

Zimbabwe National Chamber of Commerce Matabeleland Region chairperson, Mr Makenzie Dongo, said the business community was pleased with the reviews, which show that Government is responsive to the needs of business.

“The retention ratio reduction is quite impressive and encouraging for our exporters as we have been lobbying for its review. The reduction of interest rates will enhance capitalisation of businesses.

“We are quite excited that we are moving in the same direction with our Government.”

Mr Dongo, however, said industries will keep on pressing the RBZ to review forex deposit liquidation terms, which have seen some companies avoiding banking because of the compulsory liquidation of 20 percent which he said is too high.

Economist and financial market expert, Mr George Nhepera, said the latest policy reviews would increase the production capacity of local firms.

Zimbabwe National Chamber of Commerce (ZNCC)

“The reduction in interest rates is most welcome, especially to the corporates that were facing high exposure to interest charges, which was negatively affecting their viability and profitability,” he said.

Mr Nhepera said the increase in foreign currency retention will enable companies to import more raw materials to boost production – chronicle.c.zw