An unnamed blue chip company compelled government to increase interest rates as it was embarking on speculative behaviour that caused the rise of inflation, Finance minister Mthuli Ncube has said. Responding to questions directed to him in Parliament on Monday , Ncube said the interest rate was raised to arrest speculation and inflation.
“There is a company that was borrowing RTGS$ at low interest rates then go to the market and buy US$ then deposit it in FCA account. They kept doing this like a cycle thereby increasing USD demand,” he said.
Economists have thrown a lot of company names in the ring as the witch-hunt for the company in question has resulted in euphoria in the market.
Ncube further said US$525 million has been traded on the interbank market since it started trading in February and vowed never to backslide to the 2008 economic disaster where the central bank printed money through Fidelity printers.
“This is not 2008, when we had fiscal indiscipline. Now we have fiscal discipline. The policies are far different. The policies of 2008 are not being repeated,” said Ncube.
The finance minister pulled a shocker when he re-introduced the Zimbabwe dollar – a move which has caused uncertainty in the market.
Prices on selected goods have been reduced as evidenced in a survey carried out in retail outlets around the capital city.