President Robert Mugabe had appointed banker John Mangudya to head the Reserve Bank of Zimbabwe (RBZ) at a time when the central bank’s power and influence has greatly diminished, Finance Minister Patrick Chinamasa said yesterday.
The country ditched its local currency in 2009 in favour of the US dollar, leaving the RBZ unable to set interest rates or bail out troubled banks.
An economist by training, Mangudya is the 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 said.
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 departments was via the central bank, and official government records show that it added $500 million (R5.4 billion) 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. Afrexim gave the RBZ a $100m 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 rein in large disparities in deposit and lending rates that it said were squeezing liquidity.