Monetary policy( 2-2-07)

THE Reserve bank would introduce a new currency before the end of the
firstquarter, the bank chief hinted on Wednesday.
Gono said all the preparatory work regarding the work on the new
currencydubbed Sunrise 2 had been done and a few minor logistical were left
beforethe currency which

is already at the bank is introduced to the public.

“As monetary authorities we are pleased to report and update
stakeholdersthat all the preparatory work for Sunrise 2 have now been
completed andimplementation is imminent once the few minor logistical refinements
havebeen completed,” Gono said.
Gono said the experience and lessons gained under Sunrise 1 will
withoutdoubt, be put to good use under the imminent program, which will be
rolledout together with the rural banking.

“Reflecting this high state of preparedness, I am pleased to unveil to
thenation the sample designs of this imminent roll-out under which all the
current bearer cheques will be replaced by genuine currency, complete
withinternationally acclaimed safety features and convenience
characteristicsfor the visually impaired stakeholders,” added Gono.
He said to avoid being caught up with huge unexplained stacks of bearer
cheques, which beyond the cutoff date will become useless manure,
members ofthe public as well as the corporate sector are being advised to resist
temptation of hoarding cash.

THE Reserve Bank of Zimbabwe has, stopped the quasi-fiscal operations,
thegovernor, Gideon Gono, on Wednesday.
A special purpose vehicle, Fiscorp Private Limited, which will be
100%-ownedby the Reserve bank, will be established and will focus on
administering ofrecovering outstanding loans on behalf of the central bank.
The new company will also ensure that all projects that were being
funded bythe bank are completed but with the funds coming from the Ministry of

“We are not abandoning the projects that we have started because it was
notan accident to reach such a decision,” Dr Gono said while presenting
th2006 monetary policy review statement.

“The new company will ensure that dams and other projects are completed
butthis time they will be funded by the Ministry of Finance.”
The cessation of such operations would greatly reduce money supply
growth,which has been one of the major drivers of inflation.
Over the past three years, schemes that had been put in place by the
centralbank include the Productive Sector Facility.

This was winded up in June 2005 with about $3 billion having been
disbursedto various sectors of the economy such as agriculture, manufacturing,
mining, tourism, health, communications and construction.
In support of the land reform programme, the RBZ set up the
AgriculturalSector Productivity Enhancement Facility. A total of $146 billion had
beendisbursed by December 31, 2006.

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