ZIMBABWE will not adopt the United States dollar as the country’s sole currency, but will work to progressively defend the value of the local unit, while businesses that refuse to accept the Zimbabwe dollar risk arrest, Finance and Economic Development Minister, Professor Mthuli Ncube, has said.
Separately, Reserve Bank of Zimbabwe governor Dr John
Mangudya has said the central bank is planning to facilitate the establishment
of mobile Bureau de change in different parts of the country to ensure that the
facility that allocates US$50 to members of the public per week reaches all the
country’s corners.
This came out on the first day of the three-day 2022
Parliamentary pre-budget seminar which opened in Victoria Falls yesterday.
Amid agitations from some Members of Parliament,
particularly opposition legislators, for a return to the US dollar, Prof Ncube
said the Government would not pursue such a “suicidal move”.
“Colleagues we cannot adopt the United States dollar alone
as the official currency. You were there before and there were queues at banks,
huge foreign currency deficits and you had deflation. That was because of the
US dollar. It is not a good idea, and it will be suicidal to do so.”
Prof Ncube said the introduction of the local currency had
resulted in many positives, including revival of industries.
“What has happened is after we introduced the local
currency, industry is picking, it’s about stabilising the currency. We are
reforming the country, running the country under a basically dual currency
regime (Zimbabwe dollar and US dollar) and of course other smaller currencies.
“We are using both currencies and you will see shifts one
way or the other. We are trying to stabilise the Zimbabwean dollar and we have
done well to ensure salaries are not eroded. The United States dollar is performing
the role of a savings and investment currency while the Zimbabwean dollar is
performing more the role of a transactional currency than an investment
currency,” said Prof Ncube.
He said an economy such as the Zimbabwean one is bound to
have disequilibrium “because we are in an abnormal situation, but we have to
continue to have two currencies because we do not have credit lines that are
available to other countries”.
In his presentation, Dr Mangudya said to reduce the
widening gap between the parallel market and the auction rate, the RBZ will
ensure “allotments of foreign currency to all bona fide transactions through
the auction system including to individuals”.
“The bank will continue to take appropriate measures to
ensure that foreign currency allotments are settled timeously; pursue a strict
monetary targeting framework to ensure that money supply does not destabilise
the exchange rate, and ensure that truant behaviour in the economy is
minimised,” he said.
According to the RBZ, other monetary policy measures
include: supporting domestic savings in local currency through instruments that
compensate local currency depositors for potential exchange rate depreciation;
encouraging banks to set appropriate interest rate margins for savings and time
deposits to improve the appeal of the Zimbabwean dollar as a value preservative
currency; as well as continue to encourage banks to streamline bank charges to
stimulate foreign currency deposits by the banking public.
Speaker of the National Assembly, Advocate Jacob Mudenda,
implored the Ministry of Finance and Economic Development to deal with exchange
rate challenges and “find ways and means to make our local unit attractive and
the currency of choice for our transactions”. Sunday Mail
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