From iol

A weaker rand has partly been blamed for the deflationary trend currently hobbling Zimbabwe’s economy, with the chairman of Barclays Zimbabwe saying yesterday that there was a need to boost local productivity and normalise operational efficiencies.

Experts in the country say the economic situation is worsening, with margins taking a knock. Retail executives, whose companies now have to import more products from South Africa, say demand for goods and commodities in Zimbabwe is softening.

As a result of the economic slowdown in Zimbabwe, interest rates in the financial services sector have continued to narrow and Barclays Zimbabwe chairman Anthony Mandiwanza said this had necessitated the adoption of defensive strategies aimed at ensuring a quality loan book.

Barclays is one of the few companies that are managing to make a profit in the current difficult operating environment. The Zimbabwe arm of the UK bank reported yesterday that interim after-tax profit more than doubled to $1.7 million (R18.3m).

“Inflation for traded goods has been trending down partly due to the effect of a weaker rand, but also due to stagnation in demand for certain goods,” Mandiwanza said.

Zimbabwe uses multiple currencies, with the US dollar being the most-traded currency in the country. Earlier this year, the central bank broadened the currency basket to include money used in Japan, China and Australia, among others.

Written by Tawanda Karombo /Read more at iol