RBZ Declares Multi-Currency Here To Stay

RBZ Declares Multi-Currency Here To Stay
Published: 2016 June 13 09:26:34 (1531 Views)


The Reserve Bank of Zimbabwe says it is working hard to promote, restore and sustain the functionality and use of the multi-currency to mitigate concentration risk on the United States dollar. The multi-currency regime will work alongside bond notes, which will have equivalent unit value to the US dollars, to create an alternative medium of exchange only accepted in Zimbabwe.

It is expected that bond notes will curb illicit financial outflows, which the RBZ put at a minimum of $1,8 billion for 2015 alone. The RBZ believes that the multicurrency remains the ideal monetary system at the moment, until the country attains key macroeconomic fundamentals to sustain its own currency.

RBZ Governor John Mangudya told our Harare Bureau that the central bank is working tirelessly to promote the multicurrency system to spread demand for cash to other currencies.

“The multicurrency system is here to stay; we think that it is the way to go. Banks must have a multicurrency system,” he said. Mangudya said currencies like rand should be as much transaction currencies, as is the US dollar at the moment.

The US dollar accounts for over 95 percent of local transactions, despite the rand accounting for 70 percent of imports. This has created concentration risk on the greenback.

Predominant use of the dollar for all transactions in Zimbabwe has created concentration risk on the currency, resulting in serious shortage of US dollar notes at the banks.

This is despite the fact that the country uses a basket of foreign currencies among them South African rand, Botswana pula, Euro, British pound Sterling, Japanese yen, and Chinese Yuan.

The shortage resulted from a situation where Zimbabwe, which suspended its own currency in 2009 due to hyperinflation, is losing more hard currency than it is generating through import/export imbalances and illicit outflows.

Sources say government will direct parastatals and other state entities to accept payment in other currencies under the multicurrency system to mitigate the prevailing cash crisis.

Anyone intending to make payments to entities and institutions directly or indirectly controlled by State would be able to approach banks for approved currencies to make such payments.

Our Harare Bureau is reliably informed that government could issue the directive to State-owned entities this month. This comes as government is also persuading retailers to also adopt the rand pricing model to ease the cash shortage.

Government sources also said that retailers are being urged to voluntarily set prices in the South African rand, being the currency from where Zimbabwe procures the bulk of its imports, to spread concentration of pressure among other units.

Measures the government has taken to ease the shortage of cash, will function alongside bond notes, backed by and limited to a $200 million African Export and Import Bank facility. The notes will rank equal in unit value to the $200 million bond.



- Chronicle
Tags: RBZ, Rand, Dollar, Mangudya, ,
 0

You May Like These Videos

Comments

| Comment With Facebook Submit

There are no comments.

Big Reads

Bulawayo prostitutes dollarise

by Staff Reporter | 2018 December 01 00:43:29

DRAMA as mourners fight over deceased loan sharks' loot

by B-Metro | 2018 November 30 23:35:19

'Tsvangirai's ex' on police wanted list

by B-Metro | 2018 October 19 12:39:23

Dumped man glasses wife's face with broken beer bottle

by Staff Writer | 2018 October 19 12:32:05

Zimbabwe prostitutes hike prices

by Zimbabwe prostitutes hike prices | 2018 October 18 17:13:08

Pastor shocks female congregant with new panties

by Metro Writer | 2017 March 28 10:50:44

Harare man steals 10kg mealie meal from neighbour

by Court Reporter | 2017 March 28 07:56:29

Four company directors die in Vumba Mountain plane crash

by Staff Writer | 2017 March 28 07:38:59

Man with 'deformed' body bashes parents

by Staff Writer | 2017 March 24 09:48:46

Mugabe Knows Nothing About The Zimbabwe Constitution: MP

by Staff Reporter | 2016 October 01 08:12:02

Troubled Harare Giants Dynamos Falls Into Another Deep Crisis

by Own Correspondent | 2016 October 01 07:49:17

Shock As Local Bank Denies 'Rich' Mugabe's Son Heifty Credit

by Own Correspondent | 2016 September 30 19:14:54

Mugabe "Home Coming" And "Thank You" Rally On Cards

by Own Correspondent | 2016 September 23 06:48:24

Prof Moyo Was Dumped By Western Embassies, Claims Mutsvangwa

by Staff Reporter | 2016 September 22 10:08:07

Prof Jonathan Moyo In Fresh Beef With War Vets

by Own Correspondent | 2016 September 22 07:48:10

You Are Too Old To Lead, Aging Zim President Mugabe Told

by Own Correspondent | 2016 September 22 07:19:25

Younger Lover Beats Up Sugar Mama For Cheating

by Own Correspondent | 2016 September 20 03:21:43

Anti-Corruption Commission Loses Property In Failed Probe

by Own Correspondent | 2016 September 20 03:18:19

Mutsvangwa's Son Caught Up In Rape Case

by Own Correspondent | 2016 September 20 01:24:00

REMAINING PSL FIXTURES: ONLY 7 WEEKS LEFT

by Sports Correspondent | 2016 September 20 01:21:33

Victims Involved In Horror Crash Named

by Own Correspondent | 2016 September 20 01:16:09

Man Kills Uncle For Taking Him To Prophet

by Own Correspondent | 2016 September 20 01:11:08

Mphoko Threatens Zimra Over Irregular Taxes

by Own Correspondent | 2016 September 20 01:07:44

China Pours $46m On New Parliament Construction

by Own Correspondent | 2016 September 20 01:05:11

SHOCKING:14 Year Old HIV-Positive Boy Rapes 7 Pupils

by Own Correspondent | 2016 September 20 00:04:55

Tajamuka Slams Zimpapers, Fumes Over

by Own Correspondent | 2016 September 19 11:56:42

Mthwakazi Activists Torment Mujuru

by News Editor | 2016 September 19 10:52:58

We Did Not Fire Live Bullets: Police

by Staff Reporter | 2016 September 19 08:09:20

Ruling On 58 Protesters Expected Today 



by Court Reporter | 2016 September 19 08:10:40

6 Zanu PF Youths Nabbed For Assaulting Cops

by Court Reporter | 2016 September 19 08:11:50

Mutare Con-artist Cracks Zanu PF

by Own Correspondent | 2016 September 19 08:13:32

MSU Student Caught Peddling Drugs Tor Tuition Fees

by Own Correspondent | 2016 September 19 05:29:18

ZIMRA Dishes Out Rewards To Faithful Tax Payers

by Own Correspondent | 2016 September 19 05:24:19

Headmaster ‘Steals’ $17 000 From School's Fees

by Own Correspondent | 2016 September 19 05:21:24

Mujuru Party Fails To Pay $15 000 For Printed T-shirts

by Own Correspondent | 2016 September 19 05:14:37

SHOCKING: Govt Appointed Criminals In Anti-Corruption Commission

by Own Correspondent | 2016 September 19 04:11:26

BOSSO CONTINUE WINNING WAYS

by Own Correspondent | 2016 September 19 04:09:07