Zimbabwe: Restore Lender of Last Resort Role

editorial

THAT Zimbabwean companies are struggling owing to tight liquidity conditions in the country has been evident on the market since the adoption of multi currencies three years ago. A quick glance at public companies' financial statements shows how they have been forced to accept expensive short-term borrowings. Earnings are eroded by finance charges; Rio Zim, RTG, Cairns etc. The list is long.

But despite the challenges affecting business, government has not bothered to deal with a major factor that exacerbates the liquidity problems; the absence of a lender of last resort in the market.

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