Ncube blocks Mangudya plan to introduce new Zim currency

President Emmerson Mnangagwa is reported to have been forced to intervene after Reserve Bank of Zimbabwe (RBZ) governor John Panonetsa Mangudya and his boss Minister of Finance Mthuli Ncube had heated exchanges. The two men are reported to have clashed over how to deal with the currency crisis and this has resulted in the delay of the Monetary Policy Statement (MPS). The MPS was expected to have been delivered in the last week of January or by the end of the first week of Friday.

According to the weekly publication the Business Times, President Emmerson Mnangagwa, actually met with Mangudya last night as he tried to resolve the impasse. According to sources who spoke to the Business Times, Mangudya is proposing the re-introduction of local currency as soon as possible.

Mthuli Ncube, on the other hand, wants to hold off on the reintroduction of a local currency arguing that it should only be introduced 12-18 months from now. According to Ncube, the best option at the moment is to liberalise the exchange rate. However, Mangudya is worried that such a move would result in the collapse of bank balance sheets as most banks were borrowing offshore for on-lending in RTGS. Mnangagwa and the government are yet to comment on the matter.

The government is reported to have postponed the re-introduction of a local currency after criticism from Former Finance Minister Tendai Biti and foreign diplomats.

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