No Zim dollar return

HARARE - Finance minister Patrick Chinamasa yesterday reiterated that there will be no immediate re-introduction of the Zimbabwe dollar.

This is on the back of escalating fears and debate over the return of the local currency as the country suffers an acute liquidity crisis.

Some officials in President Robert Mugabe’s Zanu PF party have called for the reintroduction of the Zimbabwean dollar to help ease liquidity challenges in the economy.

Zimbabwe abandoned the currency in 2009 after it had been ravaged by hyperinflation which topped 231 million percent and adopted a multi-currency system — dominated by the United States dollar.

“Contrary to what is peddled in the newspapers, government has continued to reassure the market that the multi-currency system is here to stay,” Chinamasa said while presenting his 2014 budget.

“This position, I must emphasise, is anchored on the ZimAsset economic blue-print,” he said, adding that “as a matter of fact, depending on size or volume of trade flows, I would be persuaded to introduce other foreign currencies to the cocktail of multi-currency regime currencies, if conditions warrant.”

Monetary authorities, the Reserve Bank of Zimbabwe (RBZ), have also maintained that the discredited and worthless currency will not be returned anytime soon.

This comes as former Finance minister Tendai Biti a week ago said Mugabe’s administration —which won the July 31 harmonised elections — would be forced to reintroduce the shelved Zimbabwe dollar next year to avert total economic collapse.

“The sad truth of the matter is that the Zimbabwean dollar will be back. It is not a matter of if, but when,” the MDC shadow Finance minister said.

Biti said since September, revenues have collapsed and the government cannot meet its wage bill and other obligations.

“The government has been borrowing to pay the wage bill, in the process committing the cardinal sin that you do not borrow for consumption or recurrent expenditure,” he said, adding that “to borrow close to $300 million in a space of 100 days is irresponsible and unacceptable, more so when it is being done behind the back of Parliament.”

Biti, who is also MDC secretary-general, said since there was no Overseas Development Assistance and Foreign Direct Investment flowing into Zimbabwe, it was inevitable that a solution must be found to monetise the domestic debt, which he predicted to be around $1 billion by year end.

“The easy and inevitable solution will be to print the Zimbabwean dollar and unleash the cataleptic energy of the printing press,” he said.

His comments on the re-introduction of the local currency came on the back of increased speculation that the central bank’s subsidiary, Fidelity Printers, was of late re-engaging its former employees in preparation to mint the Zimbabwe dollar.

But Fidelity Printers and the RBZ have both dismissed speculation on the return of the Zim dollar.

“As monetary authorities, we wish to assure the business community and members of the public that there are no plans to reintroduce the Zimbabwean dollar in the near future,” acting Reserve Bank governor Charity Dhliwayo said.

Comments (1)

we want zim dollar,nikuv will help.

nyoka - 25 December 2013

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