Interbank market resumes

HARARE - Zimbabwe has reintroduced a $200 million interbank market, six years after the facility was abolished.

The Reserve Bank of Zimbabwe (RBZ) governor, John Mangudya, said in his 2015 monetary policy statement presented yesterday that resumption of the facility is expected to boost confidence in the financial system.

This comes after an injection of $100 million into the central bank by the Africa Export and Import Bank (Afreximbank) to facilitate reintroduction of the interbank system.

Mangudya said the “interbank market facility… is going to address the circulation of liquidity or funds within the local financial sector”.

“The facility shall also be used as a precursor programme for the lender of last resort function by the Reserve Bank,” he added.

He said the facility will be managed by the RBZ as an agent for Afreximbank for the purposes of managing the surplus and deficit participants’ requirements under Afreximbank Trade Debt Backed Securities (Aftrades).

“The initial borrowers under Aftrades have already been assessed and approved by Afreximbank,” he said, adding that lending to these approved banks would be strictly against acceptable collateral.

The surplus banks’ risk under Aftrades would be transferred offshore to Afreximbank.

The interbank market system, which enables banks to extend loans to one another for a specified term, ceased operating in 2009 when the country adopted the multi-currency system — leaving the RBZ no room to influence lending rates.

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