Robert Mugabe appoints new central bank governor

HARARE

Zimbabwe President Robert Mugabe has appointed a new central bank governor as his government continues to struggle to bring stability to the economy.

According to State media reports on Sunday, Dr John Mangudya will succeed Dr Gideon Gono who retired in November last year.

Before his appointment to the Reserve Bank of Zimbabwe, Dr Mangudya was the chief executive officer of the State linked CBZ Holdings.

He takes over a bank saddled with a $1 billion debt and will preside over a banking sector currently battling a liquidity crunch that has been blamed on Zimbabwe’s poor economic performance.

Finance Minister Patrick Chinamasa said Dr Mungudya’s term would expire after five years.

“Dr Mangudya is a Keynesian economist who believes in discretionary fiscal and monetary policies and in the rational expectations hypothesis,” he said.

His predecessor, Dr Gono, said the new governor would be well received by the financial markets.

“This appointment is a sure confidence booster to the financial markets and this economy in general,” he said.

“He is one man I know will be equal to the task and challenges ahead.”

REVIVE INTERBANK MARKET

On Saturday the Africa Export and Import Bank (Afreximbank) had provided a $100 million facility to the RBZ aimed at reviving the interbank market to help increase liquidity.

The interbank market has not been functional since 2009 when the country adopted use of multi-currencies. (READ: Zimbabweans to use nine major currencies)

Mr Chinamasa said the two-year facility would improve liquidity through unlocking surplus funds held by large banks to support smaller banks.

“By so doing, the liquidity which is lying idle will be used to stimulate the interbank market. This is expected to have a multiplier effect on the circulation of money in the system,” he said.

CBZ was one of the most profitable banks under Dr Mangudya’s stewardship. He also took over from Dr Gono at CBZ.