National Merchant Bank of Zimbabwe Limited (NMBZ) Chief Executive Officer Benefit P Washaya says the country’s operating environment remains challenging underpinned by scoring inflation during the financial institution’s trading update.
Zimbabwe has been witnessing inflation going up after the introduction of foreign currency accounts by the Finance Minister Mthuli Ncube.
“The operating environment remains challenging underpinned by soaring inflation,” Washaya said. “The official inflation rate for April 2019 stood at 75.86% up from a December figure of 42.09%.”
“We expect this trend to continue in Q3 although projections from RBZ is for the rate to start falling as we approach year-end.”
The CEO also said the introduction of an exchange rate between the RTGS Dollar and USD by the government meant companies had to rebase their accounts elevating the level of foreign exchange risk on company balance sheets.
The government added the RTGS Zimbabwe dollar into the exchange basket this year at a 1: 2.5 USD: RTGS Zimbabwean currency.
“Foreign currency remains scarce notwithstanding the introduction of the interbank foreign exchange market in February 2019,” Washaya said.
“We now await the market’s reaction to the recently introduced policy measures where the Central Bank has started injecting forex in the inter-bank market which has now been liberalized.”
Highlighting on the financial position of the NMB for the four months into 2019, the CEO said the market adopted a wait and see approach in the beginning of the year as everyone was literally waiting for the fiscal and monetary measures from the authorities.
“This contributed to the subdued economic activities as we experienced a very slow start to the year,” Washaya said.
“Furthermore, there was uncertainty as to whether we would continue with the multicurrency regime or fully re-dollarise.”