zimbabwe’s monetary policy regime and the cash crisis Executive Summary The cash crisis in Zimbabwe is a symptom of a multifaceted economic problem that is rooted in the entire macro economy from production, investment, all the way to consumption. The analysis of the results is given in Section 6 and the summary and policy recommendations of the study in Section 7. 2. The usual goals of monetary policy are to achieve or maintain full employment, to achieve or maintain a high rate of economic growth, and to stabilize prices and wages.Until the early 20th century, monetary policy was thought by most experts to be of little use in influencing the economy. Source: 2019 Monetary Policy Statement: pdf | The Herald 20 FEB, 2019 Reserve Bank of Zimbabwe Governor John Mangudya presents the 2019 Monetary Policy Statement yesterday. During a visit to Zimbabwe two years ago, a local Harare (Zimbabwe’s capital) businessman shared with us some of the challenges that arise when operating in this monetary chaos. Finance Minister Mthuli Ncube said Monday’s announcement gives the central bank “flexibility” to conduct monetary policy. THE Monetary Policy Statement presented by Reserve Bank of Zimbabwe governor John Mangudya this week is a damp squib which fails to substantively address the prevailing crisis and is far removed from the reality on the ground. Twenty per cent of all new foreign currency taken by Zimbabwean businesses from local customers must now be liquidated at the official exchange rate, when deposited in a domestic foreign currency bank account, as part of the measures introduced by the Reserve Bank of Zimbabwe (RBZ) in the latest monetary policy statement. The Governor of the Reserve Bank of Zimbabwe delivered his Monetary Policy Statement on the 20th February and, amongst other measures, announced the following: Dollar balances held in local FCA bank accounts and mobile payment platforms, as well as bond notes and coins, would no longer be regarded as equal in value to United States dollars. As we’ve seen from other countries struck by hyperinflation or excessive government intervention in monetary policy, Zimbabwe’s been through it all. Zimbabwe’s monetary policy measures include the establishment of inter-bank foreign exchange market, putting in place local nostro foreign currency accounts settlement platform, implementing a monetary targeting framework and ensuring the stability and resilience of the financial system through a macro-prudential framework, among others. In any basic economy, exchange rates must be formalised and transparent. The Monetary Policy Statement (MPS), which reverberated around the world, seeks to remove the various distortions which had been preventing efficient functioning of the foreign exchange market, with dangerous consequent distortions on the rest of the economy. The authorities in Zimbabwe … perspective on Zimbabwe’s road to hyperinflation; Section 3 discusses the conduct of monetary policy in Zimbabwe (1980-2012), while Section 4 covers the literature review and Section 5 the data, model and methodology. HARARE - As the dust swirls around Zimbabwe’s sudden shift in monetary policy, the real impact of the policy measures to the economy has started to emerge, with the stock exchange falling, exchange rates plummeting and shops shifting prices to the Zimbabwe dollar. The much awaited monetary policy statement presentation has come and gone in a few minutes. Last July, there was a surge in cryptocurrency trading as the government banned foreign currencies. — Picture by Memory Mangombe ... establishing an inter-bank foreign exchange market in Zimbabwe … Zimbabwe Cryptocurrency Regulation – Not Ban.