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ZIMBABWE’S CENTRAL BANK PROJECTS ECONOMIC GROWTH OF UP TO 6.0 PCT IN 2018

HARARE-- Zimbabwe's economy is now expected to grow by up to six per cent this year, up from earlier projections of around 4.5 per cent, says Reserve Bank of Zimbabwe (RBZ) governor Dr John Mangudya.

The economy had shown resilience and had been expanding since the coming in of a new administration led by President Emmerson Mnangagwa last November, he said here Monday.

The higher projection is being made despite serious bottlenecks in the economy and continuing shortages of cash and foreign currency required for imports of critical raw materials and other essential necessities.

We are optimistic that the economy will surpass the initial growth projection of 4.5 per cent, and register growth of around five (percent) this year, Dr Mangudya said. This optimism is underpinned by better-than-anticipated performance across the key sectors of the economy, in particular agriculture, mining, tourism and manufacturing during the first six months of the year.

Finance and Economic Development Minister Professor Mthuli Ncube said the growth could even be as high as six per cent but warned that the economy was yet to create meaningful job opportunities.

Dr Mangudya said inflation would remain within the regionally accepted levels of 7.0 per cent by year-end despite pressures exerted by rising foreign currency premiums being charged on the informal market as a result of current shortages on the formal market.

In order to mop up excess liquidity which is likely to fuel inflation, the RBZ announced the introduction of a weekly five per cent statutory reserve requirement for banks based on their Real Time Gross Settlement

(RTGS) balances effective Nov 1.

The RBZ also said that the bond notes which it introduced into circulation in November 2016 would continue to trade officially at par with the United States dollar, and directed banks to open separate foreign currency accounts (FCAs) mostly for those who earn foreign currency through the export of services or goods.

Among a number of measures aimed at addressing the country's deteriorating foreign currency situation, the central bank directed that all foreigners pay for goods to be taken outside the country in hard currency.

Zimbabwe is battling foreign currency shortages as demand for the US dollar continues to outstrip supply leading to a hike of rates on the parallel market. On Monday, the exchange rate on the black market for the greenback was one USD to 2.20 in bond notes, a premium of more than 100 per cent.

Source: NAM NEWS NETWORK