Zimbabwe News Update
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News / NationalChanakira warns of confidence crisisby Staff reporter44 mins ago |59ViewsProminent banker and economist Nigel Chanakira has warned that Zimbabwe risks eroding confidence in its financial system and undermining efforts to restore a credible local currency unless the Government and central bank adopt a more consultative, transparent, and market-aligned approach to monetary policy.Speaking on the sidelines of the In Conversation with Trevor Ideas Festival last week, Chanakira criticised the Reserve Bank of Zimbabwe’s (RBZ) current regulatory stance, saying “blunt” interventions – such as zero-interest foreign currency balances and administrative policy directives – were discouraging savings, investment, and long-term lending.”Right now, it’s like they [authorities] operate in a silo,” Chanakira said.”How do you take money from a guy who wants to import and then lock up his money for zero percent for two years?
Where in the world? That’s operating in bad faith.”Zimbabwe’s central bank has extended the multi-currency system – dominated by the US dollar – until December 2030, while maintaining its goal of eventually reverting to a single local currency.However, Chanakira warned that making declarations about ending multi-currency use without first restoring confidence in the financial system was counterproductive.”We want a local currency, but don’t impose it on us. Persuade us so that we have confidence,” he said.”If you declare that by 2030 there will be no multi-currency regime, it breeds distrust.
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