Government has revealed that higher currency denominations
including a $50 dollar note will be introduced in the next few months as it
moves to address cash shortages.
Finance and Economic Development Minister Professor Mthuli
Ncube revealed this during an interview with Bloomberg TV on the sidelines of
the World Economic Forum underway in Davos, Switzerland.
Prof Ncube said Government was carefully injecting cash
into the economy so as not to trigger inflation.
“First of all, we are doing two things, we are injecting
cash into the economy, drip feeding the economy. But we want to do it in a non-
inflationary way where we are changing electronic currency for physical cash,”
said Prof Ncube.
“Second thing, we are introducing higher denomination notes
$10, $20 and $50 during the course of 2020. That is what we would be doing;
introducing higher denominations notes to make sure that it’s easy for citizens
to transact. That is going to happen in the next few months.”
He said Government has made several strides to stabilise
the local currency with month on month inflation figures steadily dropping.
Prof Ncube said the high inflation rate was however normal
as the local currency was finding its footing among other currencies.
“But year on year remains high but that is expected when
you liberalise a currency and it’s trying to find its equilibrium and it’s
trying to find its footing. We however believe in the last few months it has
been quite stable, actually. It has stopped the transmission of currency
volatility into pricing so I believe we are on our way to dealing with
inflation. It will take time but it is headed there,” he said.
Prof Ncube said Government will continue engaging civil
servants to address their salary concerns.
He said Government was aware that retailers and service
providers were pricing their products and services against the US dollar.
“Wages have to catch up with adjustment to exchange rates
because retailers are still pricing in US dollars in their heads and
translating that to domestic currency. It has squashed the purchasing power of
wages and we are closing that gap by allowing wages to rise. We know the issue
and we are dealing with it,” said Prof Ncube.
He said Government was partially privatising some of its
entities as it wants the private sector to lead the economic turn around.
Prof Ncube bemoaned the severe effects of climate change
which have affected the country’s economic performance.
“We decry the impact of climate change. For us it is real.
We had a cyclone last year, followed by drought, it has impacted on food
output. We are importing food and we have also been receiving support from the
international community. We are shifting our budget to finance and
climate-proof our agriculture. We are investing in irrigation we are investing
in drought resistant crops. We are doing everything we can but also we
appreciate the support from the international community,” said Prof Ncube. Chronicle
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