Review: Monetary Policy February 2019, We Give It A 53%

Yesterday the governor of the Reserve Bank of Zimbabwe delivered his first Monetary Policy Statement of 2019. This was one of the most awaited statements to date. That in itself is a tell tale sign of where we are in our economy, the last time a monetary policy statement delivery stopped every show in Zimbabwe was in the days of Gideon Gono at the helm of the RBZ and we all know why it was so.

The policy announced yesterday lived up to its billing. It addressed the one issue that has been an elephant in the room since 2016: the crisis of currency. Below is a visual of our take on the policy:

Review: Monetary Policy February 2019, We Give It A 53%

Specificity (Is it speaking to only one thing or too many things?)73

Measurability (Is it easy to know whether it’s succeeding or not?)21

Achievability (Can it’s aims be achieved?)56

Realness (Is it real or it’s a pipe dream?)81

Time definition (Are there any specified timelines on any of the deliverables?)30

Confidence inspiring?55

What’s good about it?

It doesn’t deny the hole we are in terms of forex shortages

It acknowledges fact that the Bond Note and RTGS are not 1:1

It’s not addressing too many issues at once

Exchange control is being left to the market

Where does it lack?

There are no defined success indicators

There are no defined goals

No one knows of any timelines

The authorities and banks cannot be trusted

53

Generally makes sense but…

The Monetary Policy is good in that it acknowledges where Zimbabwe is right now. This is in contrast to the denial our authorities lived in for the past 2 years. However, the policy does not give some important specifics like what is the expected exchange rate between the RTGS Dollars and the USD.

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