(Last Updated on March 24, 2014 by Editor)
* Mangudya is CEO at Zimbabwe’s largest bank by assets
* RBZ influence diminished after adopting foreign currencies
* Central bank gets $100 million for inter-bank market
HARARE, March 23 (Reuters) – President Robert Mugabe has
appointed banker John Mangudya to head the Reserve Bank of
Zimbabwe (RBZ) at a time when the central bank’s power and
influence have greatly diminished, finance minister Patrick
Chinamasa said on Sunday.
The southern African country ditched its local currency in
2009 in favour of the U.S. dollar, leaving the RBZ unable to set
interest rates or bail out troubled banks.
An economist by training, Mangudya is chief executive at CBZ
Holdings, the country’s largest banking group by assets. He
takes over from Gideon Gono, who put the RBZ printing press into
overdrive to keep pace with hyper-inflation.
“I can confirm that the president has appointed John
Mangudya as the new governor of the Reserve Bank of Zimbabwe,”
Chinamasa told Reuters.
Mangudya worked for the central bank as an economist for 10
years until 1996 before joining the African Export-Import Bank
(Afrexim) as its manager for southern Africa.
His five-year term will start on May 1.
Zimbabwe was plagued by acute shortages of foreign currency
and basic goods at the height of its decade-long economic crisis
and inflation spiked to 500 billion percent in 2008.
By that time, funding for most government departments was
coming via the central bank, and official government records
show that it added $500 million in debt during Gono’s tenure.
Mangudya will take over at a time when the central bank is
seeking to establish an inter-bank market for the first time in
five years.
The Afrexim bank gave the RBZ a $100 million loan on
Saturday to set up the market, which allows the central bank to
set an overnight accommodation interest rate that would act as
the benchmark for market rates.
The central bank in January published an interest rate range
guide for the money market to try and rein in large disparities
in deposit and lending rates that it said were squeezing
liquidity.
(Reporting by MacDonald Dzirutwe; Editing by Sonya Hepinstall)