Cash-strapped Zimbabwe rejects single currency regime

The Zimbabwean government would not adopt a sole official trading unit. According to the Finance and Economic Development Minister, Patrick Chinamasa, the government would maintain a multi-currency regime.

‘‘We do not intend to adopt a single currency, but we will continue to bolster the strength of the multi-currency system,’‘ the minister said.

This is according to Zimbabwe’s Herald news website, who report that the Minister made the disclosure when he was presenting a ministerial statement on the economy and the pending introduction of bond notes.

The latest announcement puts to rest the belief that the government could pick the South African rand as a sole trading unit.

Further, there has been calls for the adoption of South African rand as the transacting currency by many people. The rand remains part and parcel of the multi-currency system and economic players are free to switch to any currency as a way of managing operations,’‘ Chinamasa is quoted to have said.

He said the bond notes would not be imposed on anyone who did not want to use them, adding that their introduction would not mean the return of the Zimbabwean dollar either. He also said that the issuance of the notes would be consistent with export receipts.

He also disclosed that to ensure that businesses deposit all their monies in financial institutions, the Reserve Bank of Zimbabwe was closely monitoring depositing trends of some businesses.

Those that do not deposit their revenues as expected would be explained of that legal requirement in a ‘‘market friendly’‘ approach failure to which the law would be invoked.

We do not intend to close any shop. We will explain to them only if they do not comply will we descend heavily on them,’‘ he said. To enable the use of plastic money, he said over 17,000 point of sales have been set up in various businesses.

Recent reports indicate that the country was experiencing serious shortages of the South African rand and Chinese yuan as the country attempted to shift to those currencies to address the critical shortages of cash, especially the United States dollar.

Zimbabwe Banks Run Out of South Africa Rand, Yuan And U.S Dollar https://t.co/ctxNhg5zg7 – seen this before…….very sad to see again.

— Kevin (@kcilliers) June 21, 2016

The Finance Ministry had also ordered government departments effective June 30, 2016 to accept payments in currencies other than the US dollar which increasingly become scarce.

“Government ministries, government departments, local authorities and parastatals are key players in the adoption of use of multi-currencies given the extent to which they transact with the public. In this respect, it is critical that such entities also adopt measures that facilitate restoration and promotion of the multi-currency system,” a permanent secretary of the ministry said.