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International Monetary Fund. Monetary and Capital Markets Department
International Monetary Fund. Monetary and Capital Markets Department
At the request of the Reserve Bank of Zimbabwe (RBZ), the Monetary and Capital Markets (MCM) Department conducted a virtual mission from May 3 to June 10, 2022 to assist the RBZ on strengthening consolidated supervision framework. The main focus was to support the RBZ in updating the RBZ consolidated supervision framework, enhancing prudential reporting on a consolidated basis, strengthening the assessment of banking group’s risks, and intensifying cross-border and interagency cooperation.
International Monetary Fund. Monetary and Capital Markets Department

At the request of the Reserve Bank of Zimbabwe (RBZ), the Monetary and Capital Markets (MCM) Department conducted a virtual mission from May 3 to June 10, 2022 to assist the RBZ on strengthening consolidated supervision framework. The main focus was to support the RBZ in updating the RBZ consolidated supervision framework, enhancing prudential reporting on a consolidated basis, strengthening the assessment of banking group’s risks, and intensifying cross-border and interagency cooperation.

International Monetary Fund. Monetary and Capital Markets Department
As a follow-up to the 2019 FSSR, a remote TA mission supported the RBZ with the implementation of Basel III liquidity standards. The mission reviewed the RBZ drafts of the LCR and NSFR frameworks, discussed identified material gaps with the BSD management and relevant supervisors, and provided many recommendations on enhancing the drafts of liquidity regulations, monitoring tools, reporting templates, and disclosure. Further actions for implementing Basel III liquidity standards were agreed with the RBZ.
International Monetary Fund. Monetary and Capital Markets Department

As a follow-up to the 2019 FSSR, a remote TA mission supported the RBZ with the implementation of Basel III liquidity standards. The mission reviewed the RBZ drafts of the LCR and NSFR frameworks, discussed identified material gaps with the BSD management and relevant supervisors, and provided many recommendations on enhancing the drafts of liquidity regulations, monitoring tools, reporting templates, and disclosure. Further actions for implementing Basel III liquidity standards were agreed with the RBZ.

International Monetary Fund. Monetary and Capital Markets Department
The RBZ is in the process of recommencing on-site examinations, but due to COVID-19 operational restrictions, these will need to be undertaken remotely. The RBZ has developed a draft remote examination framework document to guide this work and requested AFS assistance to review the framework, and also provide information on how other supervisors are undertaking examinations remotely. The mission provided training on international practice of remote examinations, which was presented by supervisors from the Bank of Ghana (BOG), Bank of Thailand (BOT) and the De Nederlandsche Bank (DNB) and reviewed the draft remote examination framework document. The training covered adjustments to examination framework and operational issues and key points of consideration when undertaking examinations remotely. The mission also reviewed the RBZ consolidated examination manual, to provide feedback to the RBZ on the feasibility of undertaking supervisory examinations remotely, as described in the manual and provide points for consideration for undertaking such examination remotely.
International Monetary Fund

This Selected Issues paper and Statistical Appendix analyzes recent trends in poverty and social indicators for Zimbabwe. It discusses land reform, agricultural policies, and the outcomes. The paper presents background information on the evolution of inflation and money aggregates in Zimbabwe. It analyzes the demand of money since the late 1990s, and discusses factors that can lead to diverging paths of inflation and money growth in the short term. The paper also analyzes Zimbabwe’s export performance in recent years, and identifies the factors that could improve export performance, from both a quantitative and qualitative perspective.

International Monetary Fund

Rapid depreciation of the parallel market rate in 2002 gave exporters little incentive to surrender receipts through the official system, and inflows into the RBZ remained low. The government responded by raising the surrender rate and tightening exchange restrictions in November 2002. Faced with increasing foreign exchange shortages, the government eventually depreciated the official rate for exports in end-February 2003, but to date with little effect.

International Monetary Fund

The persistent deterioration in the Zimbabwean economy over the past four years poses significant risks to the health of the banking system. Indicators such as the capital adequacy ratio, the ratio of nonperforming loans to total loans, and indicators of profitability, do not yet indicate problems, but they are distorted; for instance, the reported high capital adequacy ratio does not signal the widespread and significant under-provisioning for nonperforming assets and the erosion of capital requirements by inflation; and the low ratio of nonperforming loans to total loans reflects highly negative real interest rates. A strong and effective prudential regulatory environment is essential to ensure that troubled banks are identified and dealt with in a timely manner. While the Banking Act of 1999 significantly enhanced the ability of the Banking Supervision Department (BSD) of the Reserve Bank of Zimbabwe (RBZ) to supervise banks, and the RBZ introduced a policy to deal with troubled banks in 2001, the regulatory environment suffers from key shortcomings. For example, the RBZ does not have the authority to close unviable banks, but requires permission from the Registrar of Banks in the Ministry of Finance and Economic Development, and the RBZ is not enforcing regulations in a consistent manner, for example, banks have been receiving liquidity support for extended periods of time.