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Bank Lending Ban To Prick The Speculative Bubble - Mthuli Ncube

Bank Lending Ban To Prick The Speculative Bubble - Mthuli Ncube

Finance and Economic Development Minister Mthuli Ncube has said the ban on bank lending announced by President Mnangagwa at the weekend is aimed at combating indiscipline in the financial services sector driving inflation and weakening the local currency.

On Saturday, Mnangagwa announced a raft of policy measures to stabilise the exchange rate and deal with runaway inflation.

Among the measures was the ban on bank lending and the tightening of trading of shares on the Zimbabwe Stock Exchange (ZSE).

Inflation rose to 94.6 per cent in April from 76.1 per cent in March this year while the exchange rate is now roughly US$1: ZWL$400.

In an interview with ZTN, the Mint Special programme on Wednesday, 11 May, Ncube blamed the currency depreciation on rising global inflation due to the war in Ukraine and market indiscipline by local economic players. He said:

Indiscipline is something that we need to deal with and we will make sure that we enforce the measures that we have put in place to deal with this indiscipline.

These are temporary measures, what we are trying to do is to prick the speculative bubble, which has emerged in the forex market as well as in the equities market.

We have information and we know some of the perpetrators that were using banks to borrow cheap liquidity; cheap in the sense of negative real interest rates, to the speculate and take positions on the parallel market but also root some of the proceeds on to the equities market and then just keep playing around the equities and parallel markets.

So, we had to prick that bubble and this is how we decided to do it.

As I said, it (the ban on bank lending) is temporary and we will get to a point where we can loosen up and open up.

Ncube asserted that the fundamentals for a strong Zimbabwe dollar, that is, reserves of US$1 billion, strong fiscal position, tight and strong monetary policy stance and growing exports, are in place. He said:

The fundamentals for a strong currency are in place and yet we see this situation, which has to do, as I said, histories, indiscipline (and) rent-seeking behaviour, which is inherent in any situation where a population has come out of hyperinflation.

More: The Herald

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Dr Hercules 1 month ago

last kicks of a dying horse

Mukwerekwere 1 month ago

How come Zim is the only country most affected by the Ukraine war?
How come our currency is the weakest ?
Our fuel the most expensive?
Our per capita growth /GDP/FDI the lowest
Our citizens ,the most of migrants
in SubSaharan Africa?

Tang. Ku 1 month ago

Mt huli go and ask Gono

Gafa 1 month ago

Mthuli is a family size fool unotiudza zveku Ukraine saka zvopera rini yu hev failed as Zanu pf.

taneta 1 month ago

economy payakadhakwa 2008 kuUkraine kwaive nehondo here nhai Mthuli Ncube

saka 1 month ago

I think everything is causing inflation like many combos more vehicles on the road and three meals a day. ECOCASH agent lines were banned but nothing came out as was said by mtuli muney vendors were also arrested even the so called shaming of saboteurs but lastly hapana xhabuda saka Tori kudii mangwana anenge Oti inflation is being caused by waking up early than stipulated by the constitution


Guruhuswa 1 month ago

Kutaura kweakaguta kuti katiitii hakaseveswe sadza.. 🙄

Mafirakureva 1 month ago

Kubvongodza muto, kuseva kweakaguta

Gabarinocheka 1 month ago

there is a Shona proverb: muromo hauzarirwi nerwizi.
It means they are always excuses for one's shortcomings.
Can the Lacoste administration truly confirm that the ordinary citizen's life has improved in Zimbabwe?
If not, how is their their tenure of value to me?
Note that the likes of Mthuli earn mega US $ whilst 90% of Zimbos are struggling to hustle a dollar a day .
The Lord is neither blind that he cannot see nor dear that he cannot hear ,the suffering of his people...

Chawabvunza 1 month ago

Mthuli Ncube and John Mangudya, there is one thing which they should not forget. People are now angry with . You have always promised this and that in the past, but nothing has worked. This time if these measures do not work, it is going to have a very big bearing on the 2023 Harmonised Elections. Mthuli Ncube must justify why His Excellency President ED MNANGAGWA imported him from abroad insteady of appointing someone from within Zimbabwe. Citizens want measures which bring food on the table and not your economic jargon.


Dirigsme 1 month ago

The Cambridge economics graduate has proved beyond reasonable doubt that despite being very learned his algorithms has failed to stabilize the basic fundamentals. You have Mr. Mthuli messed up big time by your command economy (dirigsme) dictated by Zanuism. It won't work & infact u have become part of the problem rather than the solution. The truth is u have tasted the niceties of corruption and u have abated the status quo. No wonder why you spent a whole year @Sheraton. Now we know you want to don the scarf and vie for a constituency under the zany party.

1 month ago

g 1 month ago

a loud sounding nothing. hapana zvawataura mtuli ginyanomics dzega dzega. ukunyepa and you know it. uchiuya 2018 wakati iwe the only solution is to dollarize but wakapindwa nehurakashi ukaba ma USD evanhu ne 1:1 ndoomaresults acho. dira Hako rizare

Mmmm 1 month ago

A prick without critical thinking is a disaster in the making.

Robert Junior Mugabe 1 month ago

Tell everyone that Chamisa is the real deal and solution to all Zimbabwe's problems.

Vote for Chamisa. Vote for CCC.

VYBZ KARTEL 1 month ago

Our gvt supported the invasion of Ukraine by Russia but now complain about Global Inflation. You abstain from voting against invasion and now complain. So what did you get from Ukraine Invasion kkkkk. You are part of the World problems.

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