WARNING: This is Version 1 of my old archive, so Photos will NOT work and many links will NOT work. But you can find articles by searching on the Titles. There is a lot of information in this archive. Use the SEARCH BAR at the top right. Prior to December 2012; I was a pro-Christian type of Conservative. I was unaware of the mass of Jewish lies in history, especially the lies regarding WW2 and Hitler. So in here you will find pro-Jewish and pro-Israel material. I was definitely WRONG about the Boeremag and Janusz Walus. They were for real.
Original Post Date: 2010-08-02 Time: 18:00:02 Posted By: News Poster
By Martin Kadzere
Harare – The removal of statutory reserves for banks by the Reserve Bank of Zimbabwe will result in the injection of up to US$90 million onto the market.
This will slightly improve liquidity and lending capacity particularly by banks with huge deposits. The statutory reserve ratio for banks is the percentage of a bank’s deposit holdings that must be preserved by the central bank as a form of security.
In Zimbabwe, a cumulative five percent of depositors’ funds from both offshore and local deposits were kept as statutory reserves. Sometimes, the money is used as a tool in the monetary policy to regulate liquidity.
Last week, Reserve Bank of Zimbabwe governor Dr Gideon Gono said in his Mid-term Monetary Policy Review statement that the removal of statutory reserves was meant to ensure improved liquidity and low interests rates.
As at May 31, the depositor’s base stood at US$1,8 billion of which 60 percent of these funds were controlled by four banks – CBZ, Standard Charted Bank, Stanbic and Barclays.
An investment analyst, Jacob Choruma, said the removal of statutory reserves would increase money available for lending.
“Previously, the statutory reserves were just a reserve that was sitting at the central bank with banks unable to make use of those funds. “Banks, especially the top four banks which hold 60 percent of deposits will now have access to these funds and be able to lend for productive purposes.
“We should also see some interest generated by banks together with significant rise in funds being availed to the corporate and other borrowers in the economy,” said Mr Choruma.
But some analysts were of a different opinion. Some said while it was a good move, the unlocked funds would not translate into meaningful activity on the market.
They argued the funds would have very little or no impact on interest rates.
“It is a good move. But in view of the money that our economy requires, the unlocked funds will have insignificant impact,” said MBCA economist Mr Blessing Sakupwanya.
Others are of the view that there was no reason to keep statutory reserves in an economy that needs expansionary monetary policies.
“By maintaining statutory reserves in an economy like Zimbabwe, you will be basically locking up funds that would have been used to rejuvenate and expand the economy,” said an economist with Kingdom Financial Holdings.
“Statutory reserves are only appropriate in a hyperinflation environment where money supply would be rising at very astronomical levels.” Most banks are currently unable to provide meaningful credit to the private sector due to the prevailing liquidity challenges.
Local companies are battling against interest rate obligations arising from expensive loans they acquired on the local money market. As a result of the liquidity challenges the economy continues to face, it has been extremely complex for local companies to access funding at a reasonable costs.
Industry and Commerce Minister Welshman Ncube last week said about US$2 billion is required to boost capacity utilisation from the current levels.
Original Source: 
Published by the government of Zimbabwe
Original date published: 2 August 2010
Source: http://allafrica.com/stories/201008021140.html?viewall=1