Indeed in some months, we will have our own currency according to the Finance Minister. That means this fake-almost-money bond note will be booted out of circulation and we will start to use our very own Zim Dollar. You may not know it but according to the Finance Minister, the wheels of having the Zim dollar back were already set in motion in October when he ordered the separation of Nostro balances and RTGS balances. Speaking yesterday, The Finance Minister said:
On the issue of raising enough foreign currency to introduce the new currency, we are on our way already, give us months, not years. There is a balance between preservation of value and removing price distortions. The separation of accounts between the FCA and RTGS accounts was the beginning of currency reform……..Our job is to introduce a currency that will be stable and less volatile. Dealing with the fiscal side is the first order to move towards a stable currency, after all what we have now is fiscal policy and now monetary policy and we have to tighten the belt on the currency volatility.
Bringing back the Zim dollar is the perfect option as the government will ‘kill’ the currency black markets that have significantly contributed to the growth of inflation. But bringing back the Zim dollar raises several questions such as: do we have enough gold or foreign currency reserves to support the Zim dollar?
The issue of the fate of the RTGS balances will have to be solved also. Right now there is 9 billion worth of RTGS balances in circulation which RBZ doesn’t know where they came from. To avoid the erosion of people’s saving, these RTGS balances will have to be converted to the new Zim Dollar but without causing monetary inflation. Now another question pops up: who is willing to give Zimbabwe, a bad debtor, 9 billion so that it converts its RTGS balances into credible Zim Dollars?
I have just realized that The Finance Minister doesn’t pretend to be ignorant to some suggestions to adopt the South African rand as our currency. But as how Professor Mthuli Ncube put it, we first need foreign currency to get acquire the rand and make it our currency.
I also hear that the citizens are pushing towards adopting the rand, I even argued for it years ago and there was a reason, you know, if we are going to assume the rand as our currency we first of all have to acquire the rand and we need US dollars first to purchase the rand, in the long term Zimbabwe needs its own currency.
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14 comments
the recession web continues till death does us part!
You can say that again
Wow keeps getting more pathetic
Aewawooo mthuli uyooo is dangerous aaaa
Now the technocrat in the Prof is finally shining through. This is progress, bravo , bravo. Things are moving forward.
Raising forex is not hard at all, government just needs to set a realistic exchange rate to the bond to kill the whole arbitrage thing going on.The fact that there are different rates for forex depending on where you go, leaves those with US dollars weary about depositing their money in the banking system, not to mention being at the mercy of a suspect financial system (the whole phantom rtgs balances needs to be dealt with). Even changing on the black market is risky, rates change on a whim without justification (money changers take advantage of arbitrage in order to make a profit , buying low and sellling high) .
What exactly is going to back this new Zimbabwe currency since there is no economy to speak of. This will end up being just another version of Bearer checques & Bond notes!
Its said the definition of madness is doing the same wrong thing over and over again . The writer of this article, the finance minister AND this entire regime are totally and utterly brain dead. One wonders how they even manage to wipe their own arses.
the cunt ncube will soon see his little gay boy wings clipped
Dreaming is a biological function of the human anatomy.
With all due respect Prof Ncube, this is where the povo will school you a bit, and you dont get this ki d of education in class at Uni. My granny in Mtoko will tell you that it cant. You do not have a sustainable economy to back this currency with and you are not producing enough. We have a bunch of thieves in the country, the new currency will be treaded on the black market before you launch it. Your inflation will go up very quickly and before you know it you will need to remove three zeroes. It work work sir. We have been there already. Take our advice or else you will your legacy will be that of the worst finance minister in Zim.
Mthuli history has a tendency to repeat itself.Just look at what happened to the bond note to predict what will happen to the Zim currency. Basic economics says for Zim dollar to have a favourable rate against the other currencies those from other countries must demand our currency. Now for them to demand our curry we must be selling something they want to buy. We have nothing that other countries are buying worthwhile. Of course we sell tobacco but they sell that back to us as cigarettes and chemicals. We sell a few diamonds and gold they sell jewellery back to us. So we end up demanding more of their currency to buy value added products and fuel yanetsa iyi. Import substitution,recapitalization of companies, beneficiation of our resources stop corruption and get out!! of that hotel.
Moving forwad
To early to introduce our currency
Why do we need foreign currency or gold to back up our own currency? I refer to this section of the article, ‘… do we have enough gold or foreign currency reserves to support the Zim dollar? …’ and how do we get to enough?