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Zimbabwe's Mugabe Seen Using Decree Powers to Rescue Besieged Central Bank


Legal expert Lovemore Madhuku, chairman of the National Constitutional Assembly observes that the statutory instrument is the only option for Mr. Mugabe – though he regards the move as a step backward for the country

Zimbabwean President Robert Mugabe is expected to use his presidential decree powers to halt forced auctions of physical assets of the Reserve Bank of Zimbabwe to settle the institution’s large unpaid debts.

Political sources said the Cabinet has asked Mr. Mugabe to intervene amid growing concern such auctions by court order are undermining investor confidence and the economic turnaround program.

The central bank is reckoned to owe something just over US$1 billion to local and offshore creditors including private companies and non-governmental organizations whose funds in hard currencies were diverted from accounts at the bank by senior officials in 2007 and 2008, as well as development finance institutions.

Finance Minister Tendai Biti has given the RBZ a budget of just US$10 million, so it is unable to pay its debts.

Legal expert Lovemore Madhuku, chairman of the National Constitutional Assembly, told VOA Studio 7 reporter Blessing Zulu that resorting to a decree under the Presidential Powers (Temporary Measures) Act is the only option for Mr. Mugabe to end the creditor siege of the central bank - but he sees the move as a step backward.

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