Paul Nyakazeya, Group Digital Editor 
THE local banking sector plays a key role in creating an environment for a dependable foreign currency exchange system to avoid currency fluctuations, encourage investment, contain inflation and circumvent devaluation of the local currency, the Reserve Bank of Zimbabwe (RBZ) has said.
Reserve Bank of Zimbabwe governor John Mangudya
Officially opening the 2020 Institute of Bankers of Zimbabwe (IOBZ) Summer Banking School on Wednesday, RBZ governor John Mangudya said banks should be at the forefront of creating an environment that promotes currency stability.
“We want to have a dependable market-related foreign exchange system. As a country, we have chosen to follow the foreign currency auction system and want to consistently be doing so.
“We want sustainability of that system. It has given us hope and economic stability,” he said.
The three-day summer banking school is being held under the theme “Post Covid-19 Normal: Disruptive Digital Frontiers”
“We want to have domestic foreign exchange mobilisation and we want to foster compliance. We want to ensure we mobilise lines of credit through you, the banks, to your customers and for the economy,” Mandudya said.
RBZ resumed a floated foreign currency exchange system in June this year to slow runaway inflation.
“We also need to ensure we broaden the foreign exchange mobilisation landscape to ensure that our foreign currency system in Zimbabwe is dependable and that the auction system is sustainable and that we continue to enjoy price stability in this economy,” Mangudya said.
He said this can be achieved through integrity, soundness and safety of the financial system
Mangudya said banks should strictly monitor digital activities as failure to do so could create block chains that would become virtual currencies which at the end of the day increase money supply in Zimbabwe.
“We need to manage money supply in this economy. It is like managing an overdraft, we need enough money to make sure that the economy grows, but not too much money to cause inflation or allow speculative behaviour…
“To contain money supply our focus areas as RBZ is we are pursuing a conservative monetary targeting framework, that is enough money to keep us alive but not too much money to cause inflation,” he said.
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